Days of glory over for Ethereum?

News | Thought leadership | Price predictions

Good morning, and welcome to the Cryptopolitan Daily.

March 17– Ethereum was once untouchable– called the backbone of DeFi, go-to chain for NFTs, king of layer 1s and the market. But things are changing.

As capital flows to faster, cheaper, and more agile chains, the narrative that once made Ethereum untouchable is now under pressure.

Let’s analyse.

When it comes to price action, ETH is struggling– having lost 28% of it’s value in the past 30 days. ETH has broken key support levels at $3,200 and $2,200, and found the critical support level at 1800$ and 1950$ as resistance level.

If ETH breaks above the critical resistance of $1950, it might be able to test 2000$ levels, analysts predict.

ETF Sentiment: Weak and Worsening

Investor sentiment continues to decline. US listed spot Ether ETFs have seen three consecutive weeks of net outflows, highlighting persistent bearish pressure. On March 13 alone, over $73 million was pulled out— one of the sharpest daily withdrawals since launch.

This reflects growing uncertainty among institutional players about ETH’s short- to mid-term prospects.

Financial Statement: In red.

According to Tokenterminal, Ethereum’s protocol revenue fell nearly 70% in February compared to January— a sharp decline that signals waning on-chain activity and fee generation. March is not showing any strong signs of recovery either.

This slump isn't just about price. It’s also about network utility: fewer transactions, lower gas usage, and thinning user engagement.

What about usage? Active users data looks bad for Ethereum.

Solana, Ethereum’s biggest competition, leads the way with almost 10 times more daily active users than Ethereum. So the main question: Why is Ethereum suffering?

Some potential reasons.

1. Too Big to move fast

Ethereum’s scale is both its strength and its weakness. As the network grows larger, it becomes harder to implement changes quickly. Smaller chains can ship faster upgrades, incentives, and UX improvements, leaving Ethereum looking sluggish in comparison.

2. Chasing the new shiny thing

Web3 is driven by hype cycles. Users and capital often migrate toward whatever’s trending– whether it's a new L2, a novel chain like Solana, or a hyped meme coin ecosystem. Ethereum, while stable, doesn't always win the attention war.

3. High expectations, Slow delivery

With a roadmap as ambitious as Ethereum’s (Danksharding, Pectra, Verkle Trees, etc.), delays and complexity often dilute impact. When expectations aren’t met fast enough, frustration builds– especially in a market that moves at the speed of memes.

4. Cost of using Ethereum still high

While rollups are cheaper than mainnet, Ethereum L1 fees remain high for regular users. In contrast, chains like Solana or Avalanche offer lower fees– a huge UX win for casual users and developers alike.

5. Stiff competition from modular ecosystems

The rise of modular chains (e.g., Celestia, EigenLayer-based models) is pulling developer interest away. These offer a new design space and economic incentives that Ethereum doesn’t currently match.

Reading the finer print

Despite the noise, Ethereum is far from irrelevant.

Over 50% of all DeFi TVL still lives on Ethereum— a signal that serious capital and core infrastructure haven’t moved elsewhere. It remains the chain of choice for institutions, large-scale protocols, and enterprise-grade use cases.

The Ethereum Foundation isn’t sitting still either. The upcoming Pectra upgrade, improvements in L2 interoperability, and a steady shift toward rollup scalability are laying the groundwork for a more modular, efficient Ethereum.

While Ethereum faces increasing competition, its decentralization remains unparalleled. Unlike newer chains like Solana, which centralize around a small set of validators, Ethereum’s truly decentralized nature shines through.

Ethereum has built the foundation that many others are now building upon. Its open-source framework is what others, like Base and Optimism, rely on, showing the true value of its ecosystem.

Ethereum’s strength lies not in being the fastest or the cheapest, but in being the most decentralized, most secure, and most trusted chain in the blockchain space. Ethereum Foundation continues to lead the way through strong leadership from Aya Miyaguchi and ongoing protocol upgrades.

Ethereum is not surviving, it's evolving.

Market-moving headlines 🔥

In the spotlight

When retail investors are fearful, institutional investors make big moves. Abu Dhabi’s MGX invests a whopping $2 Billion in Binance.

Click here to read more about the investment.

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