Will Ethereum's "parabolic" DeFi growth be the main factor of ETH recovery?

Year-to-date, the price of Ethereum is down slightly from $155 to $148 and has been noticeably struggling to recover to 2018 levels.

The strong growth of the Decentralized Finance market, most of which are built on the Ethereum protocol, could be a fundamental factor that supports the recovery of ETH in the medium to long term.

DeFi on the rise, analysts call it "Parabolic" growth.

According to cryptocurrency investor Anton Pagi, the adoption of DeFi has increased significantly throughout the past 11 months, with the usage of Ethereum as collateral crossing 2.5 million.

Prior to the abrupt rise in the popularity of DeFi, analysts anticipated decentralized applications that run on Ethereum to bolster the usage of ETH. However, in recent months, DApps have seen lagging growth, possibly due to the substantial decline in the valuation of the cryptocurrency market.

Investors expect DeFi to be the driving factor behind the medium to long term increase in the on-chain activity of Ethereum, which could also be a key factor in the price trend of ETH.Will Ethereum price recovery anytime soon?

As the bitcoin price fell from mid-$8,000 to the low-$7,000 region, the price of Ethereum plummeted from around $180 to $148, by 17.7 percent against the U.S. dollar in a span of a week.

Given the steep sell-off in the cryptocurrency market, the ETH price is unlikely to recover in the short term.

"Istanbul brings upgrades that will alter the cost of various opcodes to prevent spamming blocks and improve overall denial-of-service attack resilience. This upgrade will enable greater Ethereum and Zcash interoperability as well as with other Equihash-based proof of work cryptocurrencies."

As the price of Ethereum dropped steeply against the U.S. dollar, tens of millions of dollars in collateral for DeFI platforms are said to have been liquidated.