ETH Ecosystem Weekly Report (Issue 11 · Week 30, 2026)

01Market Review

ETH has shown upward fluctuations this week, with weekly gains confirming a short-term bullish advantage and strengthening signals of institutional entry into the market.

With the benchmark date set at July 20, 2026, ETH is currently trading at $1,882.62, with a 7-day increase of +4.3% (indicating strong overall momentum during the week and a dominant position for bulls in the short term). The 24-hour trading volume stands at $7.2B, reflecting active market activity and solid capital support. The total global cryptocurrency market value is $2.30T, with BTC holding a dominance rate of 56.5% (showing that BTC still drives market trends, but ETH performs relatively well).

Market sentiment this week is neutral (47/100), with noticeable sector rotation. On July 15, 2026, DEXs led the gains (+6.1%), followed closely by cross-chain solutions and Layer1 networks. On July 18, 2026, the AI Agents sector saw the highest growth rate at 3.7%, while GameFi experienced a pullback. Traditional institutions are accelerating their investment efforts; on July 18, 2026, T. Rowe Price launched a multi-token spot ETF called TKNZ, with over 95% of its holdings consisting of BTC, ETH, and five other cryptocurrencies. The fund manager can dynamically adjust the allocation ratios. On July 16, 2026, Morgan Stanley introduced spot trading for Bitcoin and other assets via the E*TRADE platform, charging a fee of 50 basis points, while also expanding its services in stablecoin reserves and low-fee ETFs. On July 18, 2026, Morgan Stanley submitted revised applications for Ethereum and Solana spot ETFs, aiming to establish a fee rate of 0.14% and incorporating a staking mechanism — signaling strong interest from traditional finance firms in entering this space.

On-chain capital flows indicate adjustments in institutional strategies. On July 15, 2026, Bitcoin ETFs saw a daily net outflow of $420 million. Meanwhile, hundreds of millions in credit assets were transferred from zkSync to Stellar, suggesting that institutional funds are reallocating their investments. On July 16, 2026, BlackRock moved $147.5 million worth of crypto assets out of certain portfolios. This move was not a sell-off but rather an upgrade to the institution’s self-custody strategy, demonstrating its commitment to long-term holding. On July 17, 2026, Whales slightly increased their BTC holdings at key support levels, but overall large-scale on-chain transactions declined significantly. Geopolitical tensions and rising compliance costs are dampening risk appetite.

• Key focus areas for next week: • Progress on the staking mechanism for Morgan Stanley’s ETH/SOL ETFs and the competitive landscape regarding fees • The impact of legislative progress on bipartisan crypto bills ahead of the 2026 midterms on regulatory expectations

02Dynamics of the L2 ecosystem

2026-07-20

A significant shift has taken place in Base’s ecosystem strategy. On July 16, Base founder Jesse admitted to previous misjudgments in its social media strategy, officially handing over leadership of the app and shifting its focus from social networking to global finance and AI sectors. Facing competitive pressure from Robinhood, Base has repositioned itself as a settlement layer.

Traditional financial institutions are accelerating their efforts to integrate into the Ethereum ecosystem. On July 14, Morgan Stanley submitted revised proposals for Ethereum and Solana spot ETFs, setting a fee rate of 0.14% and including a staking mechanism. The firm plans to launch trust funds with staking features on the NYSE, to be managed by institutions such as BNY. On the same day, Morgan Stanley launched spot trading for BTC/ETH/SOL through the E*TRADE platform at a fee rate of 0.5%, marking a new benchmark for the integration of digital assets into traditional finance.

New developments have emerged in terms of regulation and compliance. On July 16, the U.S. government transferred $288 million to Coinbase, sparking questions about the definition of Bitcoin reserves. This move also raises issues regarding the applicability of regulations to 30,000 Ethereum tokens, with specific compliance details still to be clarified. Additionally, a bipartisan crypto bill is expected to pass before the mid-2026 elections, covering definitions of stablecoins and asset classification, which will reshape the global regulatory landscape.

03DeFi data

Ethereum remains at the top of the major public chains with a TVL of $40.91B, showing a 3.7% increase over the past 7 days, while its DEX liquidity pool amounts to $556M. As a representative of L2 networks, Base has a TVL of $4.56B, with a 2.5% growth rate over 7 days and a DEX depth of $385M, indicating an enhancement in its financial capabilities. Solana’s TVL is $4.87B, with DEX liquidity of $1277M—its depth is significantly higher than that of Ethereum—yet its TVL growth rate is only 0.5%. BSC boasts a TVL of $4.91B and a DEX scale of $792M, experiencing a slight 0.9% decline over 7 days.

In terms of LP yields, ETH is currently trading at $1,882.62, up 4.3% over 7 days, but it ranks only 26th in terms of liquidity rating, suggesting higher transaction friction or slippage costs on the chain. With traditional finance accelerating its entry into this space, Morgan Stanley submitted revisions for Ethereum and Solana spot ETFs on July 14, proposing a fee rate of 0.14% along with a staking mechanism to provide LPs with additional off-chain benefits and improved returns.

Regarding the depth of major trading pairs, Solana emerges as the best choice for large-scale transactions due to its DEX scale of $1277M. Although Ethereum has the highest TVL, its DEX distribution is relatively more fragmented. Arbitrage opportunities exist in cross-chain price differences and ETF pricing discrepancies. The 0.5% spot trading fee offered by Morgan Stanley contrasts with the lower fees on these chains, and institutional funds entering through the E*TRADE platform could lead to short-term liquidity reallocation.

04Derivatives Analysis

As of July 20, 2026, the total 24h liquidations across the market reached 56.89 million, with shorts accounting for 55.7%—higher than longs at 44.3%—indicating that leveraged shorts are under greater pressure during downward trends. ETH’s open interest was $26.19B, showing a slight increase of 0.01% from the previous day. The leverage level remained high but with minimal fluctuations, suggesting stability in the holding structure. ETH’s funding rate of 0.0078%/8h (long) is higher than BTC’s 0.0033%/8h, reflecting rising costs for long positions and accumulating potential for pullbacks. The BTC long/short ratio of 1.39 indicates a bias toward longs. However, since no independent long/short ratio data is available for ETH, its leverage sentiment can only be inferred from liquidation patterns, suggesting a neutral stance.

Most liquidations occurred in highly volatile small-cap cryptocurrencies, such as PROM with 140,000 liquidations, AIXBT with 8,412, and BB with 7,312, highlighting concentrated leverage risks among less popular assets. LTC and WIF each saw 20,000 liquidations, which is relatively high among mainstream coins, indicating that some traders may not be managing their leverage exposure to traditional cryptocurrencies effectively. In terms of systemic risks, as a core asset, ETH has substantial open interest and a positive funding rate. If its price falls below key support levels, it could trigger cascading liquidations, especially since shorts make up over half of the position holders—conditions that might lead to short-squeeze scenarios during rebounds. The current market sentiment index stands at 47/100, indicating a neutral mood without signs of extreme fear or greed. Nevertheless, attention should be paid to potential leverage rebalancing pressures arising from changes in ETF capital flows.

05Developer Events

As of July 20, 2026, activities among developers in the ETH ecosystem have shown a significant shift from social storytelling to the reconstruction of financial infrastructure and compliance frameworks. Jesse, the founder of Base, admitted to previous misjudgments in its social strategy and officially handed over leadership of the app, focusing the ecosystem entirely on finance and AI sectors in order to counter competitive pressures from firms like Robinhood and transform Base into an efficient settlement layer. This strategic adjustment reflects L2 developers’ reevaluation of traffic acquisition costs and user retention rates, signaling a return of ecosystem development from C-end application expansion to B-end financial efficiency optimization.

Meanwhile, the entry of traditional financial institutions is pushing developers to accelerate compliance adaptation. On July 14, Morgan Stanley submitted an updated proposal for an Ethereum spot ETF, setting a fee rate of 0.14% and incorporating a staking mechanism, with institutions such as BNY acting as custodians. This move not only lowers the threshold for institutional participation but also provides a benchmark for pricing on-chain assets through standardized product formats, prompting developers to take institutional-level risk control and auditing requirements more seriously in their smart contract designs. BlackRock, on the other hand, is shifting from being an ETF issuer to one that controls on-chain collateral and pricing power through its BUIDL government bond tokenization and Aladdin risk management system, thereby building an underlying operating system for the crypto world. This transition from “channels” to “infrastructure” requires developers to offer more transparent asset mapping and more efficient clearing capabilities at the underlying protocol level to support large-scale integration by traditional financial giants.

06Emotions and Capital

Market sentiment remains neutral overall, with the index stable at 47/100. Although there were significant fluctuations in the activity of Whales on the chain, with single-day increases ranging from 46 to 60 points, suggesting the possible entry of large amounts of capital, the sentiment index also experienced sharp swings—dropping sharply from 51.8 to 36.2 and entering the fear zone before rising by 36.0 points to return to neutrality at 50.1. Opinions among KOLs are divided; some opinion leaders have shifted sharply toward a bullish stance, with the bullish-bear gap expanding by 85.0 percentage points, giving bulls a 70% share at present. However, some argue that despite the prosperity of the institutional crypto market, the volume of tweets about Bitcoin and Ethereum has dropped to 12-month lows. The mainstream narrative focuses on the tug-of-war between Whale capital flows and market sentiment, as well as hot topics such as the validation of RWA tokenization by traditional financial giants.

07Outlook and Risks

08Outlook and Risks for the Future Market

Benchmark Date: 2026-07-20

Neutral Assessment: The current price of ETH is $1,882.62, with a 7-day increase of +4.3%. The market sentiment index stands at 47/100, indicating a neutral and volatile market trend.

Compared to the previous period, ETH’s price rose from $1,726.22 to $1,882.62, with the weekly growth rate narrowing from +7.8% to +4.3%. This suggests that although short-term bullish momentum still exists, it is weakening gradually, as the market enters a phase of consolidation at higher levels.

Key Observations

1. Accelerated Institutional Inflow and Regulatory Implementation

   • Trend Assessment: Bullish. Morgan Stanley has introduced spot trading with a 50-basis-point fee structure, while T. Rowe Price launched a multi-token spot ETF called TKNZ. The improvement in traditional financial infrastructure provides long-term liquidity support for ETH.
   • Confidence Level: High. Traditional giants such as BlackRock and Morgan Stanley continue to expand their involvement in this space. Additionally, bipartisan crypto legislation is expected to pass ahead of the 2026 midterms, enhancing regulatory clarity.

2. Fluctuations in ETF Capital Flows and Divided Market Sentiment

   • Trend Assessment: Neutral. Despite long-term optimism among institutions, BTC ETFs have repeated the volatile patterns seen in gold ETFs, with single-day net outflows reaching as high as $420 million. This reflects short-term capital sensitivity to macroeconomic risks.
   • Confidence Level: Moderate. The market sentiment index of 47/100 falls within the neutral range. Geopolitical risks and declines in tech stocks are dampening risk appetite, leading to a cautious stance among investors.

3. Reconstruction of the On-Chain Ecosystem and Strategic Adjustments in Layer 2 Solutions

   • Trend Assessment: Slightly bullish. The founder of Base admitted to misjudging its social strategy and is now focusing on finance and AI, aiming to transform the platform into a settlement layer. This should help improve the overall efficiency of the ETH ecosystem.
   • Confidence Level: Moderate. Although internal strategic adjustments may cause short-term volatility, they will ultimately help concentrate resources. Coupled with the strong performance of the AI Agents sector, which scores 6.9, the ecosystem remains dynamic.

Major Risk Factors

! Risk Warning: Rising geopolitical tensions could boost risk-aversion, while soaring oil prices might suppress performance in risk assets. If bipartisan crypto legislation progresses slower than expected, it could lead to increased compliance costs.

! Risk Warning: Traditional institutions like BlackRock saw a 38% decline in their digital asset holdings in the first half of the year. If macro liquidity tightens, institutions may accelerate deleveraging, putting downward pressure on the market.

Scenario Analysis

Neutral Assessment: ETH scores 88 in terms of technical factors and 72 in terms of fundamental factors, indicating that technical patterns are currently stronger than fundamental support. However, attention should be paid to the risk of technical divergence.

! Risk Warning: Coinbase’s plans to accept Chinese ID-based KYC procedures have sparked regulatory controversies. Stricter regulatory requirements could affect user confidence and platform liquidity.

09Related Reads

1. “T. Rowe Price Launches Multi-Token Spot ETF TKNZ”
2. “8.6 Million Families Can Invest in Cryptocurrencies: Morgan Stanley’s Fee Is Only 50 Basis Points”
3. “0.14% Fee Sparks Competition: Morgan Stanley Backs Ethereum and Solana”
4. “BlackRock Transfers $147.5 Million: Not a Sale but an Upgrade to Self-Hosting”
5. “Jesse Makes Rare Admission of Mistake: Base’s Social Dream Fails as He Shifts Focus to Global Finance”
6. “Traditional Giants Enter the Game: 0.5% Fee Paves the Way for Spot Crypto Trading”
7. “$288 Million Involved: U.S. Government’s Bitcoin Reserve Rules Under Early Scrutiny”
8. “On the Eve of the 2026 Midterms, Can a Cross-Party Crypto Bill Break Through in the U.S.?”
9. “Morgan Stanley Expands Further: ETH and SOL ETFs to Offer Additional Staking Rewards”
10. “BlackRock’s Secret Takeover: From ETF Bait to On-Chain Operating Systems”
11. “Will Bitcoin ETFs Repeat Gold’s Path? Analysts Warn of Cyclical Trends Driven by Sentiment”
12. “Despite $30 Billion Loss, BlackRock Remains Confident: $5 Billion Wallets Become New Battleground”
13. “Behind the $1.059 Billion Valuation: Coinbase’s Ambitions Regarding Options Involving Chinese ID Cards”