Ethereum prices have continued to be sluggish recently. After falling below $2,200 on March 9, it has never recovered its lost ground. The cumulative decline this month has reached 14%, far exceeding the 4% decline in the overall cryptocurrency market during the same period. This downturn not only hit investor confidence, but also exacerbated market concerns due to the 34% plunge in weekly trading volume of the Ethereum network decentralized exchange (DEX). Data shows that the top Layer2 solutions including Base, Arbitrum and Polygon were also affected by this, and trading volume generally shrank, while competitor BNB Chain grew 27% against the trend, and the emerging public chain Canto attracted attention with a weekly increase of 445%. Analysts pointed out that the weakness of Ethereum prices is directly related to the decline in activity within the ecosystem.
Further observation shows that the leading Ethereum DEX protocols are in decline: Maverick Protocol’s weekly trading volume dropped by 85%, DODO fell by 46%, and PancakeSwap of the BNB Chain ecosystem had a single-week fee income of US$22.3 million, surpassing the multi-chain Uniswap for the first time. Although Ethereum still ranks first with a total locked value (TVL) of US$4.72 billion, its weekly decline is 9%, and its leading advantage is being eroded by competitors such as Solana and BNB Chain. It is worth noting that the Ethereum futures premium rate has fallen to 3%, a new low in a year, and the spot ETF has suffered an outflow of US$293 million, and the signal of institutional investors’ declining interest is becoming more and more obvious.
The weak performance of Ethereum prices coincides with multiple attacks from both inside and outside the ecosystem: Solana has seized the market heat with Trump-themed Meme coin TRUMP, Tron and Solana have absorbed US$75 billion in stablecoin assets through low fee advantages, and Hyperliquid has launched a dedicated chain to challenge the derivatives market. At the same time, the controversy over the excessive cheapness of Layer2 solutions continues to ferment, and the current situation where the actual yield of Ethereum staking is only 2.3% makes it difficult to reverse the trend of funds flowing to high-yield competing products. Although the upcoming Pectra upgrade is highly anticipated, if the core problem of the lack of sustainable application scenarios cannot be solved, the price of Ethereum may be difficult to get rid of the current dilemma. Industry observers warn that only by building irreplaceable competitive advantages can we regain the favor of traders in the fierce public chain war.
