Ether’s weekend crash in early February revived a familiar question: is the Ethereum network falling behind new competitors or struggling to justify its valuation?
As ETH plummeted as much as 17% along with most cryptocurrencies, skeptics wondered if this was a warning sign that the protocol’s dominance could be eroding.
However, within the Ethereum ecosystem, the liquidation has not raised the same alarm. Developers and long-term players largely framed the move as a market-driven correction rather than a verdict on Ethereum’s health.
According to several indicators, network activity remains near maximum levels. “Ethereum’s TVL is actually near all-time highs when denominated in ETH,” said Messari analyst Sam Ruskin, suggesting that capital has not significantly left the ecosystem even as the token’s dollar price fell.
Other indicators point in the same direction. The entry queue to stake ETH (the wait validators face to help secure the network) has extended to approximately 70 days, a sign that demand to commit capital to Ethereum, especially among large institutions, remains strong despite near-term volatility.
That resilience is also showing up in decentralized finance, where activity has continued even as prices have deteriorated. Merchants and users continue to engage with on-chain applications in search of performance, a sign that usage has not evaporated along with sentiment.
“We are still growing and getting more users and revenue, but the token price is lagging,” Mike Silagadze, CEO of ether.fi, one of the largest recovery networks, told CoinDesk via Telegram. “We’re just focusing on the long term.”
Some market observers argue that the price movement itself is being overinterpreted. Marcin Kazmierczak, CEO of blockchain data firm RedStone, said ether’s decline appears more like market “noise” than a sign of weakening fundamentals, particularly as retail trading activity fades. What matters most, he said, is a level of institutional conviction around on-chain finance that he hasn’t seen before.
“The lack of excitement in retail is really refreshing – the next cycle will be driven by real adoption, not memes, and will allow builders to focus on long-term value creation,” Kazmierczak added.
That disconnect between price action and progress on the ground is a familiar pattern in Ethereum history. Periods of market turbulence have often coincided with some of the network’s biggest development milestones, as builders continue to ship regardless of near-term sentiment.
“As we have seen with the merger, the market is quite bad at valuing the fundamental technical realities of chains,” said Marius Van Der Wijden, lead developer at the Ethereum Foundation, noting that major technical changes are often only fully reflected in prices long after they are completed.
For some analysts, the divergence between price and on-chain data reflects broader market dynamics rather than Ethereum-specific weakness. Ruskin said the network “looks as healthy as ever,” arguing that ETH’s recent drop is more closely tied to bitcoin’s movements or broader market sentiment than any deterioration in Ethereum’s fundamentals.
Read more: DeFi’s Quiet Strength: Value Locked in Platforms Holds as Market Selloff Tests Traders
