ETH Rally to $2.5K Held in Macro, War, DApp Usage

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ETH derivatives represent a safe transition for professional desks as they hedge against downside risks and global volatility.

Despite the recent slowdown in network activity, institutional decentralized choice has put Ethereum on top.

Ether (ETH) prices fell 6% in a brief rally to $2,200 on Wednesday as the Iran war entered its sixth day. Disruptions to global oil production and Middle East natural gas shipments have pushed WTI crude prices to levels not seen since July 2024.

Investors downgraded economic growth as the conflict escalated.

In addition to the disasters that occurred that day, a federal judge ruled that the US government must begin paying tariffs on more than $130 billion in US-based businesses. The decision comes almost a week after the Supreme Court agreed that the President's IEEPA tariffs were used illegally.

Ether has been caught up in this macroeconomic conflict, despite recovering 22% from its February 24 retest of $1,800. On-chain data and derivatives markets are currently showing a lack of interest for bulls.

The ETH 30-day futures annualized premium sits well below the 5% neutral threshold, indicating a lack of bullish leverage. However, this metric is weighed down by the fact that ETH is trading 58% below its August 2025 all-time high of $4,956. The options market should be analyzed to determine if professional desks anticipate further declines.

As whales and market makers seek protection from price falls, the skew (put-call) of ETH options often rises above the 6% neutral mark. High market stress could push this indicator above 15%.

ETH options skew reached 7% on Thursday after briefly touching neutral levels a day earlier. This persistent skepticism among professional traders provides the necessary support to further increase uncertainty. Beyond external macro pressures, including US private credit defaults and increasing corporate downsizing, Ether continues to face its own headwinds.

Ethereum is positioned to capture the lift in demand for DApps

Following a modest rally in early February, activity on the Ethereum network has stalled. Continued demand for blockchain services will remain important for continued ETH price action and reduced inflation. Ethereum's built-in burning mechanism is based on a race to get into the verification queue, a process typically fueled by decentralized exchange (DEX) activity.

Weekly DEX volumes on the Ethereum network recently reached $12.6 billion, down from $20.2 billion a month ago. Decentralized app (DApp) revenues fell to $14.1 million in seven days, a 47 percent drop from last month. Competing blockchains saw a similar trend, as DEX volumes on Solana dropped by 50% over the same 30-day window.

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Despite weak onchain metrics, ETH is well-positioned to capture an eventual pick-up in DApp activity due to its dominance in Total Value Locked (TVL). When including Layer-2 scaling solutions, the Ethereum ecosystem accounts for about 65% of the total blockchain market TVL.

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Ethereum Base Layer holds $55.4 billion in TVL, while its main competitor, Solana, holds $6.8 billion. This gap serves as evidence of a preference among institutional investors over the low fees and fast user experiences offered by networks like Solana and BNB Chain.

The current weakness in Ether derivatives and onchain metrics does not indicate an imminent price collapse. If ETH accepts the $2,400 level, market sentiment may quickly shift to a sustained bullish momentum. For the time being, Ether's price is closely tied to broader risk sentiment, which will slow the pace of sustained bullishness.