Challenges Persist for Ethereum Price Below $1,900 as DeFi Metrics Decline
The price of Ethereum is still attempting to regain the $1,900 threshold amidst weakened DeFi metrics and rising competition impacting its value.
According to data from DefiLlama, the overall value locked in the network has dropped from $63 billion in January to $44 billion in February, reflecting lower liquidity and reduced investor engagement. Additionally, the inflow of stablecoins has diminished, suggesting a slower capital influx into Ethereum (ETH) protocols.
The statistics indicate a decline in decentralized exchange trading volumes, which fell from $92 billion in December to $82 billion in February. Meanwhile, other platforms such as Hyperliquid (HYPE) and Solana (SOL) show an increase in perpetual futures trading volumes, while Ethereum’s futures trading has experienced a decrease from $31 billion in December to $18 billion in February.
The revenue generated by Ethereum has significantly decreased, plummeting from $193 million in December to merely $26 million in February due to falling transaction fees and diminished network activity.
Furthermore, data from SoSoValue reveals that spot Ether ETFs have seen withdrawals for four consecutive weeks, accumulating to $176 million over the last month, indicating a decline in institutional appetite for Ethereum.
Currently, Ethereum is trading at $1,876, battling to sustain a vital support level of $1,875. With ETH persistently trading below its 50-day moving average of $2,282.50, the daily chart illustrates a distinct downward trajectory, solidifying the bearish sentiment.
Bollinger Bands indicate increased volatility, with Ethereum closely aligning with the lower band, suggesting potentially oversold conditions. The relative strength index stands at 34.51, approaching the oversold threshold of 30. This suggests weak buying pressure, though there is still a chance for a relief rally if demand increases.
Minimal trading volume reflects a lack of market participation. Should ETH fall below $1,875, it may head towards $1,800; conversely, a reversal would encounter resistance at $2,282. For a bullish shift, Ethereum needs to regain its 50-day moving average, but price movements are still under stress.
An important development to monitor is the initiative to incorporate staking in Ether ETFs. Cboe BZX has submitted a proposal to U.S. regulators seeking approval for staking in Fidelity’s Ether ETF, following a similar request from 21Shares in February. Should this proposal be approved, investors could potentially earn around 3.3% in staking rewards, which may draw increased institutional interest.