Improving ETH Fundamentals May Signal An Ether Price Recovery

Key takeaways:

Ethereum reached 16.4 million weekly transactions, proving fees can stay below $0.20 during high demand.

Decentralized exchange volume across the Ethereum ecosystem hit $26.8 billion, signaling a return of investor interest.

Ether (ETH) experienced a 15.9% price correction during the seven days ending Sunday. This volatility triggered $910 million in liquidations for bullish leveraged ETH positions, fueling fears that the $2,800 support level—which has held firm for two months—might finally break. Despite this dip in trader confidence, several onchain and derivatives metrics suggest a potential short-term rally back to $3,300.

Base layer fees are critical for determining demand for a native token, followed closely by growth in transaction volume and active addresses. While Ethereum has faced criticism for prioritizing scalability through rollups, that strategy is paying off as activity on Base, Polygon, Arbitrum, and Optimism gains momentum.

Ethereum network fees jumped 19% over the last week, while competitors Tron and Solana saw declines relative to their recent trends. More importantly, the aggregate number of transactions on Ethereum layer-2s surged to 128 million, surpassing the totals of BNB Chain and Tron. This suggests the Ethereum ecosystem can scale effectively without sacrificing its core utility.

Decentralized exchange (DEX) activity is a primary indicator of capital inflows and network fees. While demand for perpetual contracts trading peaked in August 2025 and has declined since, the trend is shifting back toward Ethereum. This is largely due to average transaction fees dropping to $0.20, down from $0.50 in November 2025.

Weekly DEX volumes on Ethereum reached $13 billion, up from $8.15 billion four weeks ago. Although Solana remains the leader with $30 billion in weekly volume, the total Ethereum ecosystem reached $26.8 billion. The Fusaka upgrade in December 2025 significantly boosted network data capacity and introduced transaction batch workflows, greatly improving the user experience. 

Ethereum dominance sticks even as professional traders turn neutral

Ethereum’s dominance in total value locked (TVL) remains strong evidence of investor preference for decentralization, even as BNB Chain and Solana struggle to capture more market share.

Professional traders are returning to a neutral stance between call (buy) and put (sell) options after a brief period of hedging against further losses. Contrary to the belief that whales anticipate every swing, the peak volume in put options actually occurred after ETH dropped below $2,800.

The ETH options put-to-call volume ratio at Deribit neutralized between Monday and Tuesday, following five days favoring puts. Notably, Sunday’s 2x peak marked the highest level in over four months. Confidence appears to be returning as traders realize the risks associated with a US government funding shutdown had a limited impact on the market.

Related: Bitmine’s staked Ether holdings point to $164M in annual staking revenue

Ether’s price weakness contrasts with the S&P 500 is trading within 0.5% of its all-time high, while 5-year US Treasury yields have stabilized near 3.85%. Investors remain cautious about inflation and recession odds; the CME FedWatch tool shows the probability of the US Federal Reserve trimming rates to 3.25% or lower by July has dropped to 28%, down from 55% last month.

Ultimately, ETH path to $3,200 will likely be driven by sustained DEX activity, rising network fees, and the clearing of the uncertainty recently seen in the options markets.