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Ether (<a data-ct-non-breakable="null" href="https://cointelegraph.com/ethereum-price" rel="noopener noreferrer nofollow" target="null" text="null" title="null">ETH</a>) has struggled to break above $2,450 for more than two weeks, and the recent 17% drop in Ethereum decentralized application (DApp) activity has raised concerns, particularly as it affects the layer-2 ecosystem. Traders are now questioning whether the current $2,250 support level will hold much longer.
On the positive side, Ethereum remains the <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/berachain-solana-competitor-proof-of-liquidity" rel="noopener noreferrer nofollow" target="null" text="null" title="null">dominant platform</a> in terms of both activity and development, although competitors are gaining ground.
<figure><img alt="Ethereum’s value accretion narrative under duress after 19% drop in ETH DApp volumes&nbsp;" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01920653-8b97-75aa-ad0c-c732dd7f6eaa">
 <figcaption style="text-align: center;">
 Top blockchains ranked by 7-day DApps volumes, USD. Source: DappRadar
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<h2 id="strong-rising-ethereum-transaction-fees-negative-impact-on-ether-price-strong">Rising Ethereum transaction fees negative impact on Ether price</h2>
Lower transaction volumes can negatively impact the demand for Ether, either by reducing the fees collected or signaling that users may be migrating to other networks.
One ongoing challenge for Ethereum is its relatively high transaction costs, which currently average $1.70. While scalability solutions have helped address this issue to some extent, they have also introduced additional complexity for users and raised questions about the long-term sustainability of the network's security.
From an investment standpoint, staking Ether has not been particularly attractive, as its 3.3% yield is lower than the 4.6% return offered by a US 6-month Treasury bill. Notably, only 28.5% of ETH in circulation is currently staked, compared to 65.8% for Solana (<a data-ct-non-breakable="null" href="https://cointelegraph.com/solana-price-index" rel="noopener noreferrer nofollow" target="null" text="null" title="null">SOL</a>), 56.9% for Avalanche (AVAX), and 62.7% for Cardano (<a data-ct-non-breakable="null" href="https://cointelegraph.com/ada-price-index" rel="noopener noreferrer nofollow" target="null" text="null" title="null">ADA</a>). As a result, <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/vitalik-buterin-solo-staking-ethereum-security" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Ethereum staking</a> is no longer a major driver of inflows, offering fewer incentives for participating in the validation process.
<figure><img alt="Ethereum’s value accretion narrative under duress after 19% drop in ETH DApp volumes&nbsp;" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01920653-bd28-7ed5-b47d-5ca40181f494">
 <figcaption style="text-align: center;">
 Staking reward rate and ratio for top blockchains. Source: StakingRewards
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While staking plays a significant role in Ethereum’s total value locked (TVL), other applications such as lending, trading, and synthetic assets also require ETH deposits. Therefore, a smaller proportion of tokens participating in staking is not necessarily a negative indicator for Ether's price. Ethereum still leads in TVL, with $44.15 billion locked, nearly ten times more than BNB Chain (<a data-ct-non-breakable="null" href="https://cointelegraph.com/binance-coin-price-index" rel="noopener noreferrer nofollow" target="null" text="null" title="null">BNB</a>) or Solana.
Although the 19% weekly decline in Ethereum DApp volumes may seem alarming, it is essential to compare this with competing blockchains to assess its full impact on fees and the number of active addresses. For instance, during the same period, Solana's DApp volumes increased by 24%, while BNB Chain saw a 23% rise. This suggests that the decline in Ethereum's DApp activity may not reflect a broader slowdown in the cryptocurrency market.
<h2 id="strong-not-every-ethereum-network-metric-points-to-lower-activity-strong">Not every Ethereum network metric points to lower activity</h2>
Among the notable negative developments on the Ethereum network was the performance of leading decentralized exchanges (DEXs). Uniswap saw an 18% drop in volume over the past seven days, CoW Swap experienced a 29% decline, and 1inch also posted an 18% decrease. In contrast, BNB Chain’s Venus Protocol recorded a staggering 236% volume increase in the same period, while the TON network's Bemo liquid staking DApp reported a 54% gain.
Ethereum's top <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/ethereum-lower-fees-vitalik-buterin-token-2049" rel="noopener noreferrer nofollow" target="null" text="null" title="null">layer-2 solutions</a> also saw reduced activity between Sept. 10 and Sept. 17. According to L2Beat, transactions per second dropped from 119 to 94 during this period. Layer-2 platforms, including Arbitrum One, Linea, Mantle, Immutable X, and Scroll, were among the negative standouts. However, despite the drop in transaction speed, Ethereum’s layer-2 total value locked (TVL) remained relatively stable at 14.6 million ETH.
Other network metrics remained steady as well. Ethereum's overall TVL held flat at 18.9 million ETH between Sept. 10 and Sept. 17. Similarly, the number of active addresses for Ethereum DApps stayed near 425,000, indicating that despite declining volumes, there are no clear signs of investors abandoning the network.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/ethereum-fractal-3-3-k-analyst-go-time-eth-price" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Ethereum fractal hints at $3.3K as analyst says its 'go time' for ETH price</a>
However, one concerning trend is the increase in Ether deposits on exchanges, rising from 12.02 million ETH to 12.24 million ETH as of Sept. 17, according to Glassnode data. A higher volume of coins on exchanges typically signals a higher likelihood of short-term selling pressure, which could negatively affect price trends.
While the 17% decline in weekly Ethereum DApp volumes may raise concerns, this alone is unlikely to push Ether's price below the $2,250 support level, especially given the stability in active users and TVL. Investors should continue to monitor the network’s activity closely, but for now, there seems to be no immediate risk stemming from this decline.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Ethereum’s value accretion narrative under duress after 19% drop in ETH DApp volumes

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