Ether.fi [ETHFI] has been on the higher side in the past, delivering an 18% gain, with the asset now on a 90-day streak of roughly 5.3% performance for the first time in a while.
The performance is closely linked to the on-chain market outlook, which shows there has been growing usage of the protocol, especially through fee generation and activity.
On-chain activity supports ETHFI’s growth
The clearest indication of growing usage of the protocol comes from its performance, which shows that users remain active.
The protocol’s fees have surged on a week-on-week basis to their highest level since the week starting June 1. Fees have reached $2.8 million, up from a low of $2.39 million for the week between June 22 and 28.
Higher fee generation points to growing activity on the protocol, with annualized revenue reaching over $50.56 million and revenue over the last 30 days standing at $2.93 million.
The total value locked also shows steady growth, indicating that investors continue to deposit and lock their assets on the platform for long-term price performance and yield.
During the week between June 22 and 28, when fees dropped to their recent low, TVL also surged at the time of writing, rising from $2.83 billion to $3.532 billion, an increase of roughly $702 million.
On a short-term scale, the growth remains visible, with the protocol’s TVL growing by $74 million between August 11 and the time of writing.
Liquidation heatmap points to a possible pullback
The liquidation heatmap analysis shows there is potential for the price to witness a local swing based on the cluster level.
The liquidation cluster on the chart shows a dense concentration of liquidity at the higher part of the chart. This local level is around $0.45, with roughly $180,000 worth of orders at this level.
Clusters tend to act as magnets, pulling price toward them. In this case, with the cluster positioned above the price, it represents a sell cluster. When price trades into this zone, a pullback could occur.
For now, the setup shows a rally-to-retracement narrative. Notably, continued capital inflows, especially through on-chain flows, could strengthen accumulation, outweigh sell pressure at this level, and push ETHFI higher.
ETHFI buybacks remain at zero in Q3
One major concern over whether ETHFI can sustain its run is its buyback activity. Token buybacks allow teams to reduce the circulating supply of their tokens, which can affect price dynamics positively.
For Q3, there has been no token buyback, with $0 spent so far. This stands in sharp contrast to previous quarters, such as Q2 and Q1, when $30,000 and $3.28 million were spent, respectively.
Ether.fi’s buyback program is designed to use part of protocol revenue to buy ETHFI.
For now, token holder data shows that buying activity remains in the market, with the number of token holders climbing to 131,940 on the chart. This implies that demand for the token remains present despite the lack of recent buyback spending.
With little incentive from buybacks, the analysis shows that holders in the market are more hinged on the protocol’s performance as a whole.
Final Summary
- Rising fees and TVL point to growing activity on Ether.fi, while token holders have also climbed to 131,940.
- ETHFI faces potential sell pressure near $0.45, with no buyback spending recorded in Q3 so far.
