Ethereum DEX Market Sees 50% Weekly Volume Drop, Network Activity Falls 55.4%

Ethereum’s decentralized exchange (DEX) market has experienced a significant downturn, with weekly trading volumes plummeting by nearly 50%. This decline is part of a broader trend, as the total volume has decreased from $86.02 billion in January to $14.54 billion in February, marking an 83% reduction in activity over the past month. This drop in trading interest signals a weakening engagement within the Ethereum network, raising concerns about broader market participation.

Despite the decline in trading volumes, Ethereum’s unique address count has shown steady growth, increasing by 11.93% from January to March. This trend suggests that while new users continue to enter the network, existing participants may be reducing their activity. The contrast between falling trading volumes and rising unique addresses indicates that users may be shifting toward holding or staking, rather than active trading. This shift could be a sign of a potential re-engagement phase, where users are preparing for future market movements.

Ethereum’s network activity has also fallen, with active addresses dropping by 55.4% from 588,782 on 25 January to 262,466 by 16 March. The price of Ethereum mirrored this decline, falling by 43.7% from $3,353 to $1,887. Historically, lower address activity has been interpreted as weaker demand, raising concerns over Ethereum’s ongoing downtrend. However, on-chain indicators such as the Market Value to Realized Value (MVRV) ratio and the Spent Output Profit Ratio (SOPR) suggest that Ethereum may be undervalued.

The MVRV ratio fell to 0.9, a level that has historically signaled that Ethereum is undervalued. Previous occurrences of such levels have coincided with bear market bottoms, suggesting that Ethereum may be near a local bottom. The SOPR, which sat at 0.97, also indicated that most ETH trades were at a loss, a common sign of capitulation. When the SOPR falls below 1.0, it has often been marked by local market bottoms as selling pressure begins to subside. The decline in both metrics suggests that Ethereum may be in an accumulation phase before recovery.

Ethereum’s market conditions present two possible outcomes. Falling trading volumes and network activity point to weak demand, potentially dragging prices lower. However, with the MVRV and SOPR at historically low levels—previously seen before major rebounds—this could also be an accumulation phase. Whether the market sees further losses or a recovery depends on how investors react to the data. The current situation suggests that Ethereum is at a crossroads, with the potential for either further decline or a significant rebound.