- Ethereum’s DEX trading volume plunged 34% in a week, while competitors like BNB Chain and Solana gained market share.
- Ethereum’s Net Unrealized Profit/Loss (NUPL) dropped to ‘Fear’ levels, last seen during the 2022 Terra collapse.
- A bear pennant pattern suggests ETH could decline another 15%, targeting $1,624.
Ethereum’s struggles are deepening as DeFi activity declines and competitors gain ground. BNB Chain and Solana have seen significant increases in trading volumes, highlighting Ethereum’s weakening dominance.
Adding to the bearish outlook, Ethereum’s NUPL has moved into the ‘Fear’ zone, a metric that previously preceded major downturns. The last time ETH reached this level was during the 2022 market crash when prices dropped below $900.
Is Ethereum Heading for Another Major Downturn
Ethereum’s DEX volumes have plummeted 34% in just a week, signaling a sharp decline in trading activity. Layer-2 solutions like Arbitrum and Polygon have also seen reduced transaction volumes. In contrast, BNB Chain saw a 27% surge, and Canto skyrocketed by 445%, underscoring Ethereum’s weakening competitive edge.
Additionally, Ethereum’s top DeFi protocols, including Maverick Protocol and DODO, recorded massive volume declines. PancakeSwap on BNB Chain even overtook Uniswap in total fees, reflecting changing trader preferences. If this trend continues, Ethereum could struggle to maintain its DeFi dominance.
Another alarming factor is the drastic drop in gas fees, down over 95% in a year. While lower fees may seem positive, they actually indicate shrinking network usage. This lack of demand could further weaken Ethereum’s value proposition as a leading smart contract platform.
Moreover, the emergence of Solana and BNB Chain as cost-effective alternatives has intensified competition. If Ethereum fails to regain momentum through network upgrades or increased adoption, its price could experience a prolonged downtrend.
Ethereum faces mounting pressure as market sentiment shifts to fear. With growing competition and declining activity, ETH must regain traction or risk deeper corrections.
“Fear is the enemy of progress.” – Anonymous
