ETH Rally Toward $2.5K Held Back By Macro, War, DApp Use

Key takeaways:

• ETH derivatives signal a shift to safety as professional desks hedge against downside risks and global instability.

• Institutional preference for decentralization keeps Ethereum dominant despite its recent drop in network activity.

Ether (ETH) price dropped by 6% following a brief rally to $2,200 on Wednesday, tracking a downturn in US equities as the war in Iran entered its sixth day. Disruptions to global oil production and Middle East natural gas shipping pushed WTI crude prices to levels not seen since July 2024.

Investors lowered their economic growth outlook as the conflict escalated and moved to a risk-off posture. 

Adding to the day’s uncertainty, a federal judge ruled that the US government must begin paying more than $130 billion in tariff refunds to US-based businesses.

Ether remains caught in this macroeconomic crossfire, which has stifled momentum despite a 22% recovery from the $1,800 retest on Feb. 24. Onchain data and derivatives markets currently reflect significant apathy from bulls.

ETH 30-day futures annualized premium (basis rate). Source: Laevitas.ch

The ETH 30-day futures annualized premium sits well below the 5% neutral threshold, signaling a lack of demand for bullish leverage. However, this metric is weighed down by the fact that ETH trades 58% below its August 2025 all-time high of $4,956. To gauge whether professional desks anticipate further downside, one must analyze the options market.

When whales and market makers seek protection against price drops, the ETH options skew (put-call) typically rises above the 6% neutral mark. Extreme market stress can push this indicator past 15%.

ETH 30-day options skew (put-call) at Deribit. Source: Laevitas.ch

The ETH options skew reached 7% on Thursday after briefly touching neutral levels a day prior. This persistent skepticism among professional traders provides bears with the necessary leverage to fuel further uncertainty. Beyond external macro pressures, including US private credit losses and rising corporate layoffs, Ether continues to face its own idiosyncratic headwinds.

Ethereum is positioned to capture the pickup in DApps demand

Ethereum network activity has stagnated following a modest rally in early February. Consistent demand for blockchain utility remains essential for sustainable ETH price action and reducing inflationary pressure. The built-in burn mechanism of Ethereum depends on competition to enter the validation queue, a process typically fueled by decentralized exchange (DEX) activity.

Weekly DEX volumes and Ethereum DApps revenues, USD. Source: DefiLlama

Weekly DEX volumes on the Ethereum network recently hit $12.6 billion, falling from $20.2 billion one month prior. Decentralized application (DApp) revenues dropped to $14.1 million over seven days, marking a 47% decline from the previous month. Competing blockchains have seen a similar trend, as DEX volumes on Solana also decreased by 50% over the same 30-day window.

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Despite the weak onchain metrics, ETH is well-positioned to capture an eventual pickup in DApp activity due to its dominance in total value locked (TVL). When including layer-2 scaling solutions, the Ethereum ecosystem accounts for nearly 65% of the total blockchain market TVL.

Related: 38% of altcoins near all-time lows, worse than FTX crash–Analyst

Total value locked (TVL) market share. Source: DefiLlama

The Ethereum base layer holds $55.4 billion in TVL, while its leading competitor, Solana, accounts for $6.8 billion. This gap serves as evidence of a preference among institutional investors for decentralization over the lower fees and faster user experiences offered by networks like Solana and BNB Chain.

The current weakness in Ether derivatives and onchain metrics does not necessarily signal an imminent price crash. Market sentiment can shift quickly toward a sustained bullish momentum if ETH reclaims the $2,400 level. For the moment, the Ether price remains closely tied to the broader risk-off sentiment, which reduces the odds of a sustainable bullish momentum.

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