Decline in DEX Activity: Ethereum Traders Plummet to Levels Not Seen Since February

Crypto News– The number of traders utilizing decentralized exchanges (DEXs) on Ethereum has declined significantly, dropping from over 95,000 at the start of the month to just 63,000 last week—marking the lowest level since February.

Decline in DEX Activity: Ethereum Traders Plummet to Levels Not Seen Since February

During the early days of March, there was a surge in trader activity amid a broader cryptocurrency rally, fueled in part by the popularity of memecoins, which boosted decentralized exchanges across various chains.

Interestingly, Ethereum faced challenges to its dominance throughout much of this rally, as networks offering lower trading fees garnered significant attention and hosted many of the rally’s most sought-after new tokens.

Despite this, Ethereum still experienced a surge in DEX trader numbers and volumes, reaching levels not seen since the memecoin frenzy of March 2023, primarily centered around the largest Layer 1 blockchain.

However, Ethereum’s trend reflects a broader slowdown in the decentralized exchange market. The GMCI MEME index, which had significantly outperformed other indices and cryptocurrencies earlier in the year, has seen a sharp decline in gains, dropping from over 300% year-to-date at the end of March to around 200% currently.

Furthermore, while centralized exchange (CEX) spot volumes saw an uptick in mid-April due to asset sell-offs amid concerns over Middle Eastern conflict, decentralized exchanges did not experience a similar rebound.

The recent downturn in decentralized exchange (DEX) activity could be attributed to a somber market sentiment prevailing in the crypto space. Geopolitical tensions and consistently higher-than-expected inflation figures in the U.S. have cast a shadow over the market, leading traders to anticipate fewer interest rate cuts from the Federal Reserve.

Despite market downturns often prompting increased trading activity from panicked investors, decentralized exchanges do not appear to be experiencing such a trend. Instead, the decline in enthusiasm surrounding memecoins emerges as the primary factor contributing to the recent decline in DEX activity.