Ethereum Price Strength vs. DApps Activity Drop: What Investors Need to Know

Ethereum price shows strength, but a 23% drop in DApps activity raises concern. Ethereum price surged 9.4% between Oct. 10 and Oct. 15, reaching its highest level in two weeks at $2,687. However, despite these recent gains, Ether remains down 25% over the past three months, reflecting investor disappointment with the recently launched spot Ether exchange-traded funds (ETFs) and the overall lack of demand for ETH, despite Ethereum’s focus on prioritizing layer-2 scaling solutions.

In the past 7 days, the Ethereum network saw a 23% decline in onchain decentralized applications (DApp) volumes and this downturn has sparked speculation that Ether’s price could follow suit. While various factors have negatively affected Ether’s price since mid-July, it is particularly striking that the overall cryptocurrency market capitalization remained relatively flat over the same three-month period.

Reduced ETH ETF demand and a drop in the supply burn rate impact investors’ thesis. In addition to these factors, some of the frustration among Ether investors stems from the lack of inflows into the US-based spot Ether ETFs. According to data, these ETFs have seen net outflows of $6 million in October. Ethereum investors are disappointed as its supply continues to increase despite high network usage.

Notable areas of weakness within the Ethereum network include Uniswap, which experienced a 16% decline in activity in the week ending Oct. 14, and Balancer, which saw a dramatic 54% drop in activity. Other key players such as CoW Swap and 1inch Network also posted weaker performance, with onchain volumes down 18% and 23%, respectively.