Ethereum’s short-term price action ‘may take traders by surprise’ — Here’s why

Ether (ETH) price has failed to close above $2,350 for the last 15 days, but some traders are still hopeful that the Feb. 6 rally could bring a more resounding change in the trend.

Traders are watching to see if Solana’s network outage and last week’s substantial Ether outflow from exchanges have an impact on price. Traders are also questioning if Ether can rally another 10% to reclaim the $2,650 level last observed on Jan. 12.

Ethereum remains the leader in DApp deposits

On Feb. 6, the Solana network experienced a 5-hour outage, disrupting block production and prompting multiple exchanges to suspend user deposits and withdrawals of SOL and Solana-based tokens. Analysts highlighted the consistent challenges faced by Ethereum competitors in maintaining uptime during peak demand, reinforcing Ethereum’s dominance in decentralized applications (DApps).

THIS is the reason why whales prefer Ethereum over any other network.

Uptime is extremely important to apps being built on top of the network, regardless of congestion.

Love Solana, but there’s a reason ETH will remain top dog for awhile or forever. https://t.co/n8ZTeNy8FX

— Tytan.eth (@Tytaninc) February 6, 2024

User @tytaninc shared his thesis on the X social network, debunking criticisms of Ethereum’s congestion and high fees. In terms of DApp deposits or total value locked (TVL), Ethereum holds a substantial 57.8% market share with $34.8 billion. If layer-2 solutions like Polygon, Optimism, and Arbitrum are included, Ethereum’s dominance extends to 67.4%, as per DefiLlama data.

Blockchain ranking by TVL market share. Source: DefiLlama

One could argue that the average DApp user on Ethereum may be unwilling to bear the network’s hefty $5.85 average transaction fee. However, data indicates that Ethereum had 382,490 active addresses engaging with its DApps in the past week alone, led by Uniswap, 0x Protocol, Metamask Swap, OpenSea, and 1inch Network. Notably, when aggregating the ecosystem’s layer-2 scalability alternatives, active addresses surge past 2 million, according to DappRadar data.