Ethereum (ETH): How Liquidity Can Help Ether Maintain its Spot in the Marketplace

Anyone who has invested in ETH may want to know about the crypto’s performance over the past few sessions. Also, it could be crucial to understand what Ethereum has in store for investors. Perhaps, the answer could be its capability to maintain value in liquidity form.

Ethereum leads the list of platforms with the highest TVL (total value locked). The network’s liquidity is a lucrative gauge of investor faith in the blockchain. Also, it shows the utility level that the respective network might command.

More value locked, especially amidst bearish markets, means a sounder utility for the blockchain. The latest data showed Optimism & Arbitrum outshined Solana in total value locked. Remember, these as layer2 blockchains that enhance ETH mainnet transactions.

Meanwhile, the two ETH L2s surpassing the layer1 network in TVL tell more about ETH’s massive lead. While publishing this content, Ethereum boasted a $71.6 billion total value locked, nearly a $67 billion one-year low.

Nevertheless, that remains far from the platform’s historical all-time high of about $249 billion. Glassnode’s chart shows the bear market’s effect on ETH’s TVL. The revival from the lows of June remained constricted, despite the blockchain’s migration to PoS (proof-of-stake).

Therefore, the TVL might recover when the market exhibits a bullish revival. On the utility front, the platform retained impressive demand for Ethereum in ‘smart’ contracts from October 2021 to May this year.

Meanwhile, the ETH amount in smart contracts plummeted drastically from May 2022 to September 14. That came as DeFi endured a massive shock that discouraged market players, hindering recoveries until after the awaited Merge.

Meanwhile, leading addresses have accumulated Ethereum amidst the turmoil. The supply by top-1% bottomed in 2022 Q1. However, the same metric had soared significantly within the past few months. That confirms that ETH whales have been dip-buying.

Capitulation Threats

Though ETH noted some improvements, capitulation threats amidst faded demand prevailed in the market. Also, the market might crash further, translating to more panic selling by investors.

Ethereum seems to have secured near-term support around the price range of $1,250, whereas its press time of $1,346 represented a minor premium. Ethereum investors should check whether the price can sustain beyond the current near-term support. A dip beneath this area could welcome sub-$1K.