Ethereum's TVL Surges to Three-Year High Amidst Price Slump

Ethereum's Total Value Locked (TVL) reached a three-year high on Thursday, sparking speculation about a potential price rise. Despite the coin's price remaining below $200, the high volume of trading activity has raised eyebrows in the crypto community.

The net value and volume of Ethereum have been increasing, with Thursday's level surpassing that of the past three years. However, the crypto community is more focused on the token's price movement. Since February 1st, the ETH token has been declining, with a 21% drop in just two weeks. The coin struggled to maintain its threshold level of $2800 and is now trading at a recent low of $2692.

The recent price plummet is indicative of the overall 12% downfall in the market cap throughout February. News of other stablecoins also experiencing a decline has been circulating. Despite this, whales in the market continue to bet on the coin, attracted by its dominance in net value locked (TVL). Since 2022, the value is at its highest, but this does not guarantee a price increase.

Increased deposits can slow down the pace of a coin's price decline, but they do not necessarily indicate an increase in network activity or transaction fees. ETH fees are not driving upwards, and while deposits are a positive sign, the transaction volume has dropped sharply by 72% compared to two weeks ago. The recent two weeks have seen a staggering 37% drop in transaction volume, making it difficult to rely on monthly accumulated volume.

Traders are eagerly searching for signs of a potential turnaround in Ethereum's future performance. However, the determination of a good future for Ethereum based solely on its TVL growth is challenging. The broader market performance will dictate how prices fare in the upcoming 2 to 3 months. Once the new financial year's policies are introduced, it will become clearer whether the market will be bullish or bearish again.