Ether (ETH) is currently trading at $2,400 and has struggled to break above $2,450 for over two weeks. A recent 19% decline in decentralized application (DApp) activity on the Ethereum network has raised concerns, especially for the layer-2 ecosystem. Traders are now questioning whether the $2,250 support level will hold for long.
On the positive side, Ethereum remains the dominant platform in terms of both activity and development, although competitors are gaining more market share.
Top blockchains ranked by 7-day DApps volume, USD | Source: DappRadar
The Impact of High Transaction Fees and the Staking Trend
Ethereum remains ahead in activity and development, despite growing competition. High transaction fees, currently averaging $1.70, have hurt demand for Ether. While scaling solutions have partly addressed this issue, they also add complexity for users and raise questions about the long-term sustainability of the network’s security.
From an investment perspective, staking Ether with a 3.3% yield is no longer as attractive as it once was, compared to the 4.6% return on a 6-month US Treasury note. Only 28.5% of ETH in circulation is staked, much lower than other networks such as Solana (65.8%), Avalanche (56.9%), and Cardano (62.7%). As a result, Ethereum staking is no longer a major driver of capital flows, while providing less incentive to participate in the validating process.
However, Ethereum still leads in total value locked (TVL), with $44.15 billion, nearly ten times more than BNB Chain or Solana.
Staking Reward Rates and Ratio for Top Blockchains | Source: StakingRewards
DApp Activity Status and Network Metrics
Ethereum's 19% weekly drop in DApp volume may be cause for concern, but it needs to be compared to competing blockchains to fully assess its impact on transaction fees and active address counts.
For example, during the same period, Solana's DApp volume increased by 24%, while BNB Chain recorded a 23% increase. This suggests that the decline in Ethereum's DApp activity may not reflect an overall slowdown in the crypto market.
However, some notable negative indicators on the Ethereum network include a decline in trading volume on leading decentralized exchanges (DEXs) such as Uniswap (down 18%), CoW Swap (down 29%), and 1inch (down 18%). In contrast, BNB Chain’s Venus Protocol saw a 236% increase in volume, while TON network’s Bemo liquidity staking protocol recorded a 54% increase.
Activity on Ethereum's top layer-2 solutions also dropped between September 10 and 17, with transactions per second dropping from 119 to 94. Still, Ethereum's layer-2 TVL remained stable at 14.6 million ETH.
One worrying trend is the increase in the amount of Ether deposited on exchanges, from 12.02 million ETH to 12.24 million ETH as of September 17, according to data from Glassnode. An increase in the volume of coins on exchanges usually indicates a higher likelihood of short-term selling pressure, which can negatively affect the price trend.
While a 19% decline in Ethereum’s weekly DApp volume may be cause for concern, it is unlikely to push Ether below the $2,250 support level, especially given the stability in active users and TVL. Investors should continue to monitor network activity closely, but for now, there appears to be no immediate risk from this decline.
Source: https://tapchibitcoin.io/eth-price-gap-kho-khan-sau-khi-khoi-luong-dapp-giam-19.html
