Over the past three months, the price of Ethereum (ETH) has surged by 70%, while market liquidity has fallen noticeably. This appears to be mainly due to increased volatility across the cryptocurrency market as a whole, as well as investors becoming more cautious toward risky assets. According to data from Dune Analytics, the number of active addresses on the Ethereum mainnet has increased, but liquidity in decentralized exchange (DEX) pools has continued to shrink. This suggests that although trading activity has picked up, long-term investors and market makers are becoming less involved.
In my view, this divergence between price and liquidity is unhealthy. ETH’s price surge is being driven more by short-term speculation and market sentiment than by fundamental support. Although Ethereum’s value as a Layer 1 blockchain is increasingly recognized, relying too heavily on short-term price movements rather than progress in real-world applications is unsustainable. Investors should pay closer attention to the growth of Ethereum’s ecosystem, technical upgrades, and the adoption of practical applications, rather than blindly chasing rising prices.
#ETHUp70%InQ3ButLiquidityFalls
In my view, this divergence between price and liquidity is unhealthy. ETH’s price surge is being driven more by short-term speculation and market sentiment than by fundamental support. Although Ethereum’s value as a Layer 1 blockchain is increasingly recognized, relying too heavily on short-term price movements rather than progress in real-world applications is unsustainable. Investors should pay closer attention to the growth of Ethereum’s ecosystem, technical upgrades, and the adoption of practical applications, rather than blindly chasing rising prices.
#ETHUp70%InQ3ButLiquidityFalls