Ether (ETH) has been unable to surpass the $2,350 mark for the past 15 days, but some traders remain hopeful that the rally on February 6 could bring about a more significant change in the trend. Traders are closely monitoring the impact of Solana’s network outage and the substantial outflow of Ether from exchanges last week. They are also questioning whether Ether can rally another 10% to reach the $2,650 level observed on January 12.
Despite the challenges faced by Ethereum’s competitors in maintaining uptime during peak demand, Ethereum continues to lead in DApp deposits. The recent outage on the Solana network, which lasted for 5 hours, disrupted block production and led to the suspension of user deposits and withdrawals of SOL and Solana-based tokens on multiple exchanges. This incident further reinforces Ethereum’s dominance in the decentralized applications (DApps) space.
User @tytaninc on the X social network has debunked criticisms of Ethereum’s congestion and high fees, emphasizing Ethereum’s substantial market share of 57.8% in terms of DApp deposits or total value locked (TVL), amounting to $34.8 billion. When layer-2 solutions like Polygon, Optimism, and Arbitrum are included, Ethereum’s dominance extends to 67.4%, according to DefiLlama data.
While some may argue that the high average transaction fee of $5.85 on Ethereum may deter DApp users, data shows that there were 382,490 active addresses engaging with Ethereum’s DApps in the past week alone. Uniswap, 0x Protocol, Metamask Swap, OpenSea, and 1inch Network were among the leading DApps. Furthermore, when considering layer-2 scalability alternatives, the number of active addresses surges past 2 million, as per DappRadar data.
Despite the DApp metrics, the flow of assets remains the ultimate determinant of price. Recent net flows of Ether on exchanges show that reserves have reached their lowest levels in over a year, with net withdrawals amounting to 7 million ETH since April. This indicates low demand from holders to sell their coins. Staking metrics also provide insights into how ETH holders feel about selling, and currently, there is a record high of 29.6 million ETH locked in staking, up from 28.9 million one month prior.
To gauge investor sentiment towards Ether, one can analyze the BTC futures premium or basis rate. In a neutral market, fixed-month contracts should trade at a premium of 5% to 10%. Data shows that the ETH futures premium stabilized at 7% on February 6, indicating a balanced demand between leverage longs (buy) and shorts (sell).
Analyzing the ETH options market can also provide insights. The delta skew indicator, which compares call (buy) and put (sell) options, remains neutral within the range of -7% to +7% since February 2. This suggests that there is no clear optimism or fear prevailing in the market.
In conclusion, while Ether’s bullish momentum continues, professional traders may be surprised. However, it is important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any decisions.