Ethereum, the second-largest cryptocurrency by market capitalization, has been making waves in the crypto space despite a decline of 15% in its price. The cryptocurrency found support around $4,300 compared to August 24, amidst a wider cryptocurrency market correction. This correction is likely a reflection of the deteriorating macroeconomic conditions. However, several on-chain indicators suggest that Ethereum could break over $5,000 in the short term.
One of the key indicators of Ethereum’s strength is its network activity. The weekly increase in fees of 30% enabled Ethereum to overtake Tron as the network with the highest influence. Including Layer 2 activity, Ethereum’s total fees reached $16.3 million, more than double Solana’s $7.9 million. According to Defillama, Ethereum has created its second-highest decentralized application fees (DAPP) since February 2022.
Blockchains were classified after 7-day fees. Source: nansen
In August, Ethereum DAPP’s fees generated $466 million, which corresponds to an increase of 36% compared to the previous month. In contrast, Solana’s DAPP fees fell by 10% in the same period, while the BNB chain recorded a contraction of 57%. Among the top participants in Ethereum included Lido with $91.7 million, Uniswap with $91.2 million, and AAVE with $82.9 million on 30-day fees.
Weekly Ethereum Dapps fees, USD. Source: Defillama
Ethereum’s Institutional Adoption
While on-chain activities have progressed, ether derivatives indicate that retailers are skeptical about ETH in the short term. The monthly futures premium is 5% and hovers on the edge of a neutral to bearish market. Such caution is expected after a withdrawal of 15% on August 24. However, the opening interest of futures rose by 26% in 30 days and reached $58.5 billion, signaling that retailers do not give up on the asset.
Ether 2-month futures premium. Source: laevitas.ch
Ether options were measured on Monday at 3%, well within the neutral range from -6% to +6%, as traders assign similar probabilities to surprise themselves in both directions. A strong increase over the neutral threshold would have suggested expectations of a breakdown below $4,200, but that has not come about.
ETH 30-day options in Deribit (PUT call). Source: laevitas.ch
Will the Adoption of Companies Continue to Increase the ETH Price?
The institutional adoption of Ethereum is also building. According to Strategicethreserve.xyz, companies have added 2 million ETH reserves over the past 30 days. Companies, including Bitmine Immersion Tech (BMNR), Sharplink Gaming (SBet), and the Ether Machine (ETM), now have a combined ETH worth more than $20.2 billion.
Source: x/ethzilla_ethz
It is even more important that some of these companies start to put capital on Ethereum in Dapps. Ethzilla (ETHZ) announced new obligations on Tuesday and underlined the growing activities in the entire ecosystem. This expansion of real use strengthens the role of ETH in decentralized applications and could further distinguish Ethereum from competitors.
Despite the cautious signals from derivative markets, the increasing network activity in Ethereum leaves the ETH position to regain bullish dynamics. For more information on Ethereum’s price movements and market analysis, visit https://cointelegraph.com/news/ether-fights-to-hold-dollar4-3k-as-eth-treasury-growth-dapps-activity-soar?utm_source=rss_feed&utm_medium=rss_category_market-analysis&utm_campaign=rss_partner_inbound
