Ethereum (ETH) Price (ETH) that is lying below $ 2.2k – here’s why

Ether (Eth) The price advanced 14.2% after the rebound from the $ 2,000 support level on March 4 but struggled to maintain levels of $ 2,200. Noteworthy, ETH has underperformed the broader cryptocurrency market of 11% over the last two weeks, reflecting the investor’s uncertainty. To recover the bullish momentum, basic obstacles must be met.

While it is difficult to determine the exact factors behind entrepreneurs that reduce ETH exposure, many factors are likely to contribute to weaker emotions. This includes denial of onchain activity, a lower total amount locking (TVL), a net positive ETH release rate, and speculation -haka surrounding a potential US strategic Digital Asset Reserve. In general, demand for ETH as the native token of Ethereum appears to be weak.

Poor onchain activity, Spot ETF Outflows and Eth Supply adds reinforcement concerns

Ether investors may be concerned about the growing probability of Solana (Sol) securing approval for funds exchanged by the exchange (ETF) in the US, which may increase competition for institutional capital. Currently, Bitcoin only (Btc) And the ETH is holding onto this status, yet Ether ETF has seen $ 336 million in net outflows between Feb. 19 and March 4. As they feature weak ETH performance, it appears as a symptom than a major cause.

To understand the main drivers behind Ether’s underperformance, it is important to study Ethereum onchain metrics.

The Ethereum network maintains its leadership in the 7-day decentralized exchange (DEX) volume, reaching $ 22.45 billion. However, the gap among competitors was narrow, especially as Solana saw a 4% gain at the same time. The main weaknesses for Ethereum include a 49% collapse in curve finance activity and a 16% decline in pendle volumes, according to Defillama data.

Similarly, the total amount of Locking (TVL) by Ethereum fell 13% within two weeks to $ 50.8 billion, raising concerns about whether ETH could miss the broader cryptocurrency market in the near term. In comparison, TVL of the BNB chain declined 8% at the same time, though remains smaller than $ 5.1 billion.

Uniswap is among the vulnerable performers in Ethereum deposits, with a total amount locked (TVL) decreasing 22.5% in 30 days. Other well-known denials include Ether.FI (-18.8%), Lido (-17.3%), and Morpho (-17%).

Slowing Ethereum’s onchain activity created an unusual scenario in which the average transaction fees fell below $ 1 in the first time since July 2020. However, the demand for blockchain processing remains weak, leading to an increase in ETH supply. The combustion mechanism introduced by EIP-1559 is further offset by expanding the Blob space for layer-2 scalability solutions.

Related: Bitcoin is ‘likely to continue to combine’ in this pullback phase – analyst

If the upcoming ‘Pectra’ Upgrading the network Payment distribution can be balanced throughout the Ethereum ecosystem is not yet clear. However, it is likely that more adjustments will be needed later. In addition, US Commercial Secretary Howard Lutnick has been reported to have been confirmed Bitcoin will accept A “unique status” under Donald Trump’s plans.

On March 7, the first White House Crypto summit Includes leading industry executives, founders, and investors with representatives from the president’s working group in digital assets. They will discuss regulatory plans and Trump’s suggested strategic reserves. Businessmen remember that Ether had a low chance of incorporating as a leading possession, which could limit the upside -up ETH potential.

This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.