The price of Ethereum (ETH) has remained under pressure, having fallen below $2,200 on March 9. In the wake of a 14% drop throughout the month, investor sentiment is wavering, particularly as the broader cryptocurrency market has only declined by 4% during the same timeframe. The most pressing concern for traders is the recent 34% decline in decentralized exchange (DEX) activity on the Ethereum network.
Recent data reveals that DEX volumes on Ethereum have plummeted, impacting its layer-2 solutions significantly. For instance, the DEX activity on Solana dropped by 29% while SUI experienced a 17% decrease. In stark contrast, the BNB Chain emerged with a 27% weekly volume increase, while Canto has seen a staggering 445% growth.
Furthermore, Ethereum’s performance has been overshadowed by competitors. Notably, fees generated by PancakeSwap, the leading DEX on BNB Chain, surpassed those of Uniswap and highlighted a downward trend for Ethereum’s demand as fees fell. Current trends show that Ethereum’s Maverick Protocol and DODO faced losses of 85% and 46%, respectively.
Despite retaining its position as a leader in total value locked (TVL) at $47.2 billion, Ethereum’s decline of 9% in TVL has narrowed the gap with other platforms. While Solana experienced a 3% drop in TVL, BNB Chain showed a 6% increase, signaling stronger competition within the space. Additionally, the decreasing demand for ETH can be observed through the annualized futures premium which has fallen below the 5% neutral threshold, marking the lowest in over a year.
As Ethereum’s challenges mount, the upcoming Pectra upgrade must catalyze a shift by presenting a clear competitive edge. With rising competition from Solana—especially in memecoins and stablecoin volumes—Ethereum’s need for sustainable adoption has become more critical than ever. Notably, demand from institutional investors appears to be waning, with net outflows from Ethereum ETFs reaching over $293 million since March 5. For Ether to recover and regain momentum, it must not only adapt but lead through innovation.
