Ether’s weekend drop at the end of February reignited a familiar question: Is the Ethereum network lagging behind its new competitors or struggling to justify its valuation?
As ETH plunged as much as 17% alongside most cryptocurrencies, skeptics wondered if this was a warning sign that the protocol’s dominance could be eroding.
Yet within the Ethereum ecosystem, the sale has not sparked the same concern. Developers and long-term players have largely framed the move as a market-driven correction rather than a verdict on Ethereum’s health.
By several metrics, network activity remains near peak levels. “Ethereum TVL is actually near all-time highs when denominated in ETH,” said Sam Ruskin, an analyst at Messari, suggesting that capital has not significantly fled the ecosystem even as the token’s dollar price has fallen.
Other indicators point in the same direction. The entry queue for staking ETH – the wait validators face to help secure the network – extends to around 70 days, a sign that demand for committing capital to Ethereum, particularly among large institutions, remains strong despite short-term volatility.
This resilience is also evident in decentralized finance, where activity has held up even as prices have deteriorated. Traders and users continue to use on-chain apps in search of yield, a sign that usage has not evaporated alongside sentiment.
“We continue to grow and get more users and revenue, but the price of tokens is lagging,” Mike Silagadze, CEO of Ether.fi, one of the largest restructuring networks, told CoinDesk via Telegram. “We are only focused on the long term.”
Some market observers say that price action itself is overinterpreted. Marcin Kazmierczak, CEO of blockchain data firm RedStone, said ether’s decline looks more like market “noise” than a signal of weakening fundamentals, particularly as retail trading activity fades. What matters most, he said, is a level of institutional conviction around blockchain finance that he has never seen before.
“The lack of enthusiasm for retail is actually refreshing: the next cycle will be driven by real adoption, not memes, and it will allow manufacturers to focus on creating long-term value,” Kazmierczak added.
This disconnect between price action and progress on the ground is a familiar pattern in Ethereum’s history. Periods of market turbulence have often coincided with some of the network’s most important development stages, with manufacturers continuing to ship their products regardless of short-term sentiment.
“As we saw with the merger, the market is pretty bad at pricing the fundamental technical realities of chains,” said Marius Van Der Wijden, lead developer at the Ethereum Foundation, noting that major technical changes are often not fully reflected in prices until well after their completion.
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 decline is more closely tied to Bitcoin’s movements or broader market sentiment than any deterioration in Ethereum’s fundamentals.
Read more: The Quiet Strength of DeFi: Value Locked Across Platforms Holds Up as Market Liquidation Tests Traders
