TLDR
- In just 24 hours, Ethereum made a notable jump of 6%, reaching the $2,300 threshold, despite some faltering metrics within the DeFi space.
- The total value locked within Ethereum’s DeFi projects saw a significant decline, starting from $71 billion at the beginning of the year and dropping to $50 billion by February.
- From December to February, decentralized exchange (DEX) volumes took an 11% hit, as more capital seemed to gravitate towards Layer 2 solutions and Solana.
- Network transaction fees have plummeted dramatically—dipping from $142 million to $46 million—indicating a reduced demand for network resources.
- The anticipation surrounding the Pectra upgrade and the upcoming White House Crypto Summit could potentially sway Ethereum's price movements.
Ethereum regained the $2,300 level, even as its ecosystem displayed some troubling signs. The cryptocurrency, second only to Bitcoin by market cap, saw a 6% surge within a single day, offering a sigh of relief to investors who had witnessed its recent struggles.
This price uptick occurred in the midst of falling decentralized finance (DeFi) performance indicators. According to data from DeFi Llama, Ethereum experienced a downfall in its total value locked (TVL), which descended to $50 billion by February—a sharp drop from January's heights of $71 billion.
There's a downward trend in trading volumes on DEXs too, with figures dwindling from $92 billion in December to $82 billion in February, marking an 11% decrease over the two months.
Ethereum’s central blockchain seems to be losing capital to alternative systems like Layer 2 solutions and Solana, potentially contributing to the deteriorating figures.
There’s been a striking drop in network fees, with Ethereum's fee income plunging from $142 million to $46 million, signaling a considerable decline in users seeking block space.
The upcoming Pectra upgrade could act as a catalyst for Ethereum, focusing on boosting network efficiency and transaction fees, although it's still uncertain if this will counteract the DeFi downturn.
Technical Analysis
Technical insights reveal Ethereum trading below a crucial resistance marker at $2,846. Indications from the Bollinger Bands suggest a potential breakout might be on the horizon, while the relative strength index of 41.40 indicates moderate momentum.
Recent rises in price have happened alongside subdued trading volumes, hinting at some buyer hesitation, despite the upward movement. Experts suggest that ETH must break through resistance levels to solidify its gains.
If Ethereum breaks past $2,846, it could pave the way to $2,946. However, failing to maintain its current position might lead to a fall back to the $2,200 support zone. Upcoming price fluctuations will likely dictate the path forward.
Some experts draw comparisons to patterns from 2019. Crypto analyst Benjamin Cowen highlights that ETH exhibited a similar wedge pattern during the 2019 Quantitative Tightening phase, differing mainly in that the current phase has a longer duration.
According to analyst Crypto Caesar, the $2,300 range is a crucial support area, showing resilience in past conditions and likely influencing Ethereum’s forthcoming market movements. Breaching this level could indicate further market downturns.
Current technical readings display a bearish tilt. The MACD line lies beneath the signal line, with the MACD Histogram presenting negative figures. The Bull Bear Power reading of -217.27 underscores prevailing bearish dynamics.
The mood in the market remains uncertain as we approach the White House Crypto Summit on March 7. Recently, President Donald Trump proposed establishing a national crypto strategic reserve, sparking some optimism. Ethereum However, experts emphasize the need for clear regulations. Absent adequate guidance, the summit might turn into a 'sell-the-news' scenario, potentially causing price drops instead of lasting gains.
Ethereum's value recently hit $2,134.03, experiencing a 2.91% decline within 24 hours. Its market cap stood at $257.34 billion, while 24-hour trading volume surged by 28.63%, reaching $37.24 billion.
Maisie is a seasoned journalist specializing in Crypto & Financial news, contributing to Moneycheck.com, level-up-casino-app.com, Computing.net and holding the position of Editor in Chief at Blockfresh.com.
