Opinion: The Price Surge in This Cycle Is Driven More by External Factors Such as Macroeconomics, ETFs, and Policy Influences

According to a report by Jinse Finance, citing charts released by @cmdefi, Uniswap’s current TVL is hovering around 60% of its previous peak. Since the current ETH price is close to its 2021 level, the data still reveals some insights and hints at where the market could head next: On DEXs, most on-chain native assets are paired with ETH. In 2021, the on-chain application boom led to a surge in asset issuance and a large number of ETH trading pairs, which is noticeably different from the current cycle. Although ETH prices have returned to 2021 levels, the market is clearly not being driven by on-chain adoption. Activities such as asset issuance and liquidity creation on-chain have dropped significantly this cycle, which is indirectly reflected in the TVL data. This cycle’s price increase is more influenced by external factors (macroeconomics, ETFs, policy, etc.). With companies like DAT establishing strategic reserves as a major force, if the next step can drive capital back on-chain and spur significant application innovation on the existing foundation, the market’s momentum will become more diversified. This could very well be the key factor determining how much higher the market can go in the future.