TLDR
Ethereum surged 6% in 24 hours, reaching $2,300 despite declining DeFi metrics
Total value locked fell from $71 billion in January to $50 billion in February
DEX volumes dropped 11% from December to February as capital flows to Layer 2s and Solana
Network fees decreased from $142 million to $46 million, showing reduced demand
The upcoming Pectra upgrade and White House Crypto Summit may influence ETH’s price trajectory
Ethereum has reclaimed the $2,300 price level despite showing several signs of weakening fundamentals in its ecosystem. The second-largest cryptocurrency by market cap surged 6% in a 24-hour period, bringing relief to investors who had watched it struggle in recent weeks.
The price movement comes amid deteriorating decentralized finance (DeFi) metrics. According to data from DeFi Llama, Ethereum’s total value locked (TVL) dropped to $50 billion in February. This marks a steep decline from January’s peak of $71 billion.
DEX volumes are also trending downward. Trading activity on decentralized exchanges fell from $92 billion in December to $82 billion in February. This represents an 11% decline over just two months.
Capital appears to be flowing away from Ethereum’s main chain. Alternative ecosystems such as layer 2 solutions and Solana are capturing an increasing share of crypto activity. This shift may explain part of Ethereum’s declining metrics.
Network fees have seen a dramatic reduction. Ethereum’s fee revenue dropped from $142 million in January to just $46 million in February. This suggests a major decline in demand for block space on the network.
The upcoming Pectra upgrade offers a potential catalyst for Ethereum. This technical improvement aims to enhance network functionality and fee efficiency. However, questions remain about whether these upgrades will be enough to reverse the decline in DeFi activity.
Technical Analysis
Technical analysis shows Ethereum trading below a key resistance level of $2,846. The Bollinger Bands indicator suggests a possible breakout could be coming. The relative strength index sits at 41.40, indicating modest momentum.
Low trading volume accompanies the recent price uptick. This suggests some hesitation among buyers despite the positive price movement. Analysts note that ETH needs to push past resistance levels to maintain its gains.
A break above $2,846 could open the path to $2,946. However, failure to hold current levels might lead to a retest of $2,200 support. Price action in the coming days will likely determine the next major move.
Some analysts have drawn parallels to 2019 patterns. Crypto specialist Benjamin Cowen points out that ETH formed a wedge pattern during the 2019 Quantitative Tightening (QT) period. The current pattern shows similarities with only one main difference – a longer QT duration.
The $2,300 region represents a vital support area according to analyst Crypto Caesar. This zone has demonstrated stability in previous situations and will likely shape Ethereum’s upcoming market movement. Breaking this level could signal additional market declines.
Technical indicators currently display bearish momentum. The MACD line sits below the signal line, and the MACD Histogram shows negative values. The Bull Bear Power indicator stands at -217.27, suggesting bearish forces currently dominate the market.
Market sentiment remains mixed ahead of the White House Crypto Summit on March 7. President Donald Trump recently proposed forming a national crypto strategic reserve, with Ethereum among the included cryptocurrencies. This announcement has generated some positive sentiment.
However, analysts caution that regulatory clarity is crucial. Without sufficient regulatory guidance, the summit could become a “sell-the-news” event, potentially leading to further price drops rather than sustained gains.
Ethereum’s price stood at $2,134.03 with a 2.91% decline in a recent 24-hour period. Its market capitalization reached $257.34 billion while 24-hour trading volume rose to $37.24 billion, showing a 28.63% increase in activity.
