Ethereum price surged 6% in the past 24 hours, reclaiming the $2,300 level despite weakening decentralized finance metrics.
According to data from Defi Llama, in February, Ethereum’s (ETH) total value locked fell to $50 billion from a peak of $71 billion in January. Additionally, decentralized exchange volumes have been declining as capital flows into alternate ecosystems such as layer 2s and Solana (SOL). DEX volume fell from $92 billion in December to $82 billion in February, a 11% decline.
Ethereum network fees, on the other hand, have decreased from $142 million in January to barely $46 million in February, indicating a decline in demand. The upcoming Pectra upgrade, which is expected to enhance network functionality and fee efficiency, might be a short-term catalyst.
However, it is still unclear if these upgrades will be enough to stop the decline in DeFi activity. Furthermore, technical issues or delays could slow down the momentum and maintain ETH within its current range.
On the technical side, Ethereum is still trading below the $2,846 critical resistance. A squeeze in the Bollinger Bands suggests a possible breakout. The relative strength index at 41.40 indicates modest momentum, although bullish strength might be confirmed by a move above 50.
Despite the price uptick, low trading volume suggests hesitation among buyers. ETH needs a strong push past resistance to sustain gains, or it risks another pullback. A decisive break above $2,846 may open the path to $2,946, while failure to hold current levels could lead to a retest of $2,200 support.
Meanwhile, sentiment remains mixed ahead of the White House Crypto Summit on Mar. 7. Recently, U.S. President Donald Trump proposed the formation of a national crypto strategic reserve, with Ethereum being among the cryptocurrencies.
Although some see this as a sign of a possible reversal, analysts caution that if enough regulatory clarification is not reached, the summit may become a “sell-the-news” event and lead to further downturns.
Source link
