Ethereum has remained relatively weak after failing to settle above $2,400 over the past three months.

Cointelegraph reported on Wednesday that Ethereum has fallen 21 percent so far in 2026, lagging the overall cryptocurrency market, which has declined 11 percent over the same period.

Markets cite slowing on-chain activity, intensifying competition in the DApp ecosystem and diminished appeal to institutional investors as reasons Ethereum’s rebound has been repeatedly blocked. While altcoins broadly have followed part of the market recovery, some assessments say ether has not reflected it enough.

DApp activity, a key indicator for the Ethereum ecosystem, has weakened. Decentralised exchange (DEX) trading volume has fallen 53 percent over the past six months, and Ethereum DApp revenue, which depends heavily on it, has dropped 49 percent over the same period. A sharp decline in memecoin prices and a slowdown in token launches have reduced exchange demand, while protocol hacking has also weighed.

Crypto industry hacking losses in April totalled $630 million. KelpDAO and Drift Protocol accounted for 82 percent of the total. Blockchain security firm Hacken pointed to forces linked to North Korea as being behind the attacks. DEX activity across the industry also fell 47 percent over the past three months.

Competitive dynamics are also working against Ethereum. Some rival chains have chosen to improve scalability at the base layer itself, reducing friction for ordinary users. Ethereum remains the largest by overall ecosystem size including layer 2, but Solana and Hyperliquid together accounted for 42 percent of the share by DApp revenue. Given that Ethereum’s total value locked is six times larger, it means the revenue-generation gap stands out more.

Misunderstandings around network upgrades have also been cited as a burden. Alchemy engineer Uttam Singh said some in the market are wrongly interpreting the planned Glamsterdam hard fork as making rollups risky. The upgrade is designed to triple base-layer throughput and enable proactive collection of block data and parallel transaction execution.

Still, users and investors are finding it hard to accept why layer 2 rollups are still needed as base-layer scalability improves. It is also unclear whether such changes will lead to higher network fees or translate into higher staking yields.

Institutional sentiment is also not favourable to ether, as corporate treasury assets at Bitmine, the listed company with the largest ether holdings, remain in a loss zone. Bitmine, led by Tom Lee, invested $12.2 billion in Ethereum purchases, but the value of its holdings has fallen to around $10.8 billion. The risk of an immediate large-scale selloff is not high, but it is weighing on the asset’s appeal from an institutional perspective.

Ethereum’s chances of reaching $2,800 are not completely blocked. Still, its relative underperformance versus the broader crypto market is continuing as weaker on-chain activity, intensifying DApp competition and reduced institutional appeal overlap.