A drawdown for DEXs: Traders on Ethereum hits lowest level since February

The number of DEX traders on Ethereum has fallen from over 95,000 at the beginning of the month to just 63,000 last week, marking the lowest number of traders since February.

The number of traders picked up at the start of March amidst a broader crypto rally, with a particular emphasis on memecoins, which helped decentralized exchanges across multiple chains.

Ethereum was actually challenged for dominance during much of this rally, as networks that offered cheaper trading attracted a lot of attention and hosted some of the most popular new tokens of the rally.

But of course, Ethereum was still able to bask in the glory of the rally, with the number of DEX traders and DEX volumes reaching highs not seen since the memecoin-mania that took place back in March 2023, which was primarily centered around the largest Layer 1.

And it does seem like the trend on Ethereum is a sign of a broader slowdown in the decentralized exchange market.

For starters, while the GMCI MEME index still vastly outperforms its top 30, Layer 1, and Layer 2 counterparts, as well as bitcoin and ether themselves, it seems as though the majority of its gains are behind it. At the end of March the index was up over 300% year-to-date but is now up only 200%, showing a sharp decline in April.

And while spot volume on CEXs picked up in mid-April, primarily because of a sell-off in assets due to fears over Middle Eastern conflict, it seems that DEXs did not see the same rebound .

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The recent turnaround could be tied to more gloomy market sentiment. Not only are geopolitical tensions weighing on the market, but consistently higher-than-expected inflation data in the U.S. is also causing traders to expect fewer rate cuts from the Federal Reserve.

While sometimes market downturns cause more trading from panicked investors, it does not seem decentralized exchanges are seeing that. The decline in excitement around memecoins seems to be the primary reason for the recent drop off in DEX activity.

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