Ethereum trails Bitcoin by 10% as DeFi TVL drops $43 billion
Ethereum is under renewed pressure: ETH is holding near $2,140, while its DeFi ecosystem has lost tens of billions of dollars from its January peak. The weakness appears broader than a normal market correction, as it coincides with falling TVL, a shrinking share of medium-term holders and a deteriorating technical chart structure.
Highlights
- ETH is trading near $2,140, showing weakness relative to Bitcoin.
- DeFi TVL on Ethereum fell from $106.7 billion on Jan. 15 to $63 billion on May 18.
- In four months, the network lost about 41% of locked value, or roughly $43 billion.
- The share of ETH held by 3-6 month holders fell from 18.63% to 12.73% over six weeks.
DeFi becomes the main weak spot
According to BeInCrypto, Ethereum’s price has stalled near $2,140, while worsening DeFi metrics have added pressure on the asset. TVL, or the total value locked in Ethereum DeFi protocols, fell from $106.687 billion on Jan. 15 to $62.957 billion on May 18. That marks a drop of nearly 41% in four months.
The decline coincided with ETH underperforming Bitcoin. The report noted that Bitcoin rose by about 2% over the month, while ETH fell 8%, creating a roughly 10% performance gap between the two largest cryptocurrencies. For Ethereum, this is especially sensitive because DeFi has long been one of the main sources of demand for the network and its base asset.
Holders reduce exposure
On-chain data from Glassnode also points to weakening confidence. The HODL Waves indicator shows that the group of holders who held ETH for 3 to 6 months reduced its share from 18.63% on April 7 to 12.73% on May 18. That is a decline of almost 6 percentage points in six weeks.
This group matters because it reflects not the shortest-term speculators, but a more stable layer of investors. When such holders reduce their share, the market receives a signal that the pressure is not only about daily volatility. Against this backdrop, the technical picture becomes more important: ETH needs to hold key levels to avoid deepening the selloff.
Why Ethereum is losing ground
The current underperformance of Ethereum is not only the result of general market sentiment but also internal challenges. The DeFi sector, long the main growth driver for the network, is experiencing significant capital outflow. At the same time, investors appear to be rotating into Bitcoin, which many view as a more reliable “digital gold.”
For Ethereum, this represents a serious test. While the network remains the leader in smart contracts and decentralized finance, regaining investor confidence will require more than just a better macroeconomic backdrop. It will also depend on tangible progress in scaling and new use cases within its ecosystem.
In an earlier report, we noted that Vitalik Buterin sees AI-assisted verification as a path to safer Ethereum code.
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