Ether price has been stuck below $1,900 since July 21. This has somewhat brought uncertainty and skepticism to investors, despite recent positive signs, including the launch of PayPal’s Ethereum-based stablecoin as well as a surge in requests for Ether-based ETFs.
Dapps deposits and active users drop significantly
The Ethereum network is struggling due to high gas fees, the average transaction fee has been more than $4 over the past two months, which has limited demand for the network’s decentralized applications (DApps). There has been a significant drop in the total locked value (TVL) of deposits on the Ethereum network. According to DefiLlama’s report, TVL has fallen to the lowest level in the past 3 years.
Ether deposits have dropped significantly, specifically around $12.9 million, in contrast to $14.75 million was recorded three months ago.
The number of active addresses using DApps is also decreasing. In the last 30 days, the main DApps on Ethereum had less than 25% active users. Investors may not be satisfied with the transaction fees on the network.
Demand between bulls and bears is balanced
Ethereum quarterly futures typically trade at slightly higher than the spot market, suggesting that sellers are asking more funds to delay settlement. As a result, ETH futures in healthy markets will trade at an annual premium of 5 to 10%.
According to the futures premium, also known as the basis indicator, professional traders in the Ether market have not been able to rally since July 16. The current 5% level hovers above the neutral to bearish threshold, indicating an equilibrium in demand between leveraged long and short positions.
Competitors
The launch of Coinbase’s Base network on August 9 was also a challenge that prevented Ether from breaking above the $1,900 mark. Several development teams in the ecosystem have announced their services for the Base network, which now incorporates a version of Uniswap.
While Ether’s bullish outlook is boosted by the potential approval of an ETF and a substantial user base backed by PayPal’s stablecoin, it still faces competition from existing contract platforms and competitors with abundant resources. Such a scenario causes an element of uncertainty around the recovery of the $1,800 support level.