Ethereum decline: Exchange reserves at a record low, but the price continues to fight with dramatic losses

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Ethereum: Current market development and challenges

The Ethereum market is currently facing challenging developments. The offer on the stock exchanges has dropped to the lowest level since 2015, with only 8.97 million ETH, which are available for trade. While this decline could be seen as a positive sign of the shortage for many, the ETH price has suffered greatly in the past few weeks and has dropped by 47 %.

price trend and market reactions

In the past 30 days, Ethereum's price has fallen by 27 %. Despite a recent attempt to reverse the downward trend, other old coins such as Ripple (XRP) and Cardano (ADA) have achieved significantly better performance in the same period, which has led to growing concern among the Ethereum investors. The panic in the community and among large investors, also known as "whales", is increasing.

Agency of the Ethereum exchange reserves

According to the Santiment's published data, the available Ethereum offering on stock exchanges has decreased by 16.4 % in just seven weeks. This suggests that Defi (decentralized finance) and staking options have absorbed significant amounts of Ethereum. This could help reduce sales pressure on the cryptocurrency. In the past 48 hours, large investors have accumulated around 360,000 ETH.

The price for Ethereum has given in 3 % in the last 24 hours, despite a positive trend in the previous seven days. Ethereum is currently being traded at an average price of $ 1,946, while the trading volume has dropped by 33 % to $ 11.57 billion within 24 hours. Information from Coinglass also show that in the last 24 hours liquidations of long and short bets worth over $ 31 million took place for Ethereum, with 76 % of these positions.

challenges from Layer-2 protocols

An important problem for Ethereum is the increasing competition from Layer-2 protocols. In particular, the decentralized stock exchanges (Dex) on platforms such as Arbitrum and Base recorded a volume of $ 5.67 billion in the past week, which makes up more than half of the total volume of Ethereum. Less activity in the Mainset led to a significant decline in fees and sales, which fell from USD 218 million in December to only $ 46 million in February.

The Dencuna upgrade has reduced the gas fees by 95 %, which reduces transaction costs for users, but also negatively influences the income of the network. According to the Defilama, the Total Value Locked (TVL) in Ethereum fell by over 20 % last month, which endangers Ethereum's defect dominance. The TVL has dropped from $ 76 billion to $ 46 billion, while Base has had an increase of 21 % in the past seven days.

future perspectives and developments

While the situation remains challenging, Ethereum ETFs that offer staking options could be perceived as a potential savior. The NYSE and CBOE submitted applications to the SEC for approval. In the meantime, however, Ethereum-Spot-ETFs recorded an outflow of $ 370 million

The coming weeks and months promise to be decisive for the future of Ethereum, especially with regard to the competition and market acceptance of Layer-2 solutions as well as the potential approval of ETFs by regulatory authorities. Investors and market analysts will keep an eye on the developments.