Why did the price of ENS fall?
Ethereum Name Service (ENS) dropped 1.02% in the last 24 hours to $20.73, underperforming the overall crypto market, which fell 0.17%. This continues a larger weekly decline of 14.55%, driven by technical weaknesses, profit-taking, and mixed news within its ecosystem.
- Technical Weakness (Mixed Effects)
- Competition from Linea’s Layer 2 Network (Negative Impact)
- Profit-Taking After July’s Price Surge (Negative Impact)
Deep Dive
1. Technical Weakness (Mixed Effects)
Overview:
ENS’s price fell below important support levels, including its 30-day moving average ($23.11) and a key Fibonacci retracement level ($22.22). Technical indicators like the MACD show bearish momentum, while the RSI is nearing oversold levels but hasn’t signaled a clear reversal yet.
What this means:
The price is now testing another support level at $21.40. If it falls below this, it could drop further to $20.35, a low point from September 2025. However, since the RSI suggests the price might be oversold, there’s a chance for a short-term bounce if buyers step in around $20.35.
What to watch:
Keep an eye on the $21.40 to $20.35 range. If the price closes below $20.35 on a daily basis, it would break the bullish trend seen from July to August.
2. Competition from Linea’s Layer 2 Network (Negative Impact)
Overview:
On September 10, 2025, ConsenSys launched Linea, a Layer 2 network with its own token. Most of Linea’s tokens (85%) are set aside for growing its ecosystem. Market participants are calling Linea “Ethereum’s silver,” which has drawn attention away from ENS, since ENS depends on Ethereum’s dominance.
What this means:
Investors might be shifting funds toward newer Layer 2 projects like Linea, reducing demand for ENS’s Ethereum-based naming service. Linea’s token structure, which doesn’t include venture capital allocations, makes it more appealing to traders compared to ENS’s fully circulating supply.
3. Profit-Taking After July’s Price Surge (Negative Impact)
Overview:
ENS’s price jumped 71% from late June to August 2025 but hit resistance at $32 and started to pull back. Data from blockchain tracking shows more ENS tokens moving to exchanges, indicating holders are selling to lock in profits.
What this means:
The recent 14.55% weekly drop fits a common pattern where ENS corrects sharply after failing to break key resistance levels. Additionally, derivatives data shows that short positions make up 55.45% of open trades as of July 24, adding downward pressure.
Conclusion
ENS’s recent price drop is due to technical breakdowns, shifting investor interest to new Layer 2 projects like Linea, and profit-taking after a strong summer rally. While oversold conditions might lead to a short bounce, the lack of strong positive news and upcoming token unlocks totaling $453 million across projects including ENS this week increase downside risks.
Key point to watch: Can ENS hold the $20.35 support level, or will the token unlocks in September trigger another wave of selling? Also, watch Ethereum’s price—if ETH falls below $4,000, it could lead to more selling pressure on tokens tied to the Ethereum ecosystem.
What could affect the price of ENS?
Ethereum Name Service (ENS) is balancing promising upgrades with market challenges.
- ENSv2 & Layer 2 Migration – Upcoming improvements aim to make ENS faster and cheaper, encouraging more users.
- Web3 Identity Partnerships – Collaborations with Gemini and Bitso are expanding ENS’s real-world use.
- Whale Activity Risks – Large institutional buys totaling $5.5M contrast with $4M in team tokens moving to exchanges, signaling potential selling pressure.
In-Depth Analysis
1. Protocol Upgrades & Governance (Positive Outlook)
Overview:
The ENS decentralized autonomous organization (DAO) recently approved funding for eight development teams to work on ENSv2 (ENS Blog). A key goal is to move ENS’s domain resolution to Linea’s "Namechain," a Layer 2 (L2) solution, by the end of 2025. This upgrade is expected to cut transaction fees for .eth domain registrations by over 90%.
What this means:
Lower fees could lead to faster growth in domain registrations, which currently exceed 2 million .eth names. Historically, more registrations have been linked to positive price movements for ENS. Successfully moving to Layer 2 could establish ENS as the go-to naming system across Ethereum-compatible blockchains.
2. Exchange Listings & Custody Integrations (Mixed Impact)
Overview:
Gemini Wallet started offering free ENS subdomains in August (The Block), and Bitso enabled ENS domain conversions for its 25 million users in Latin America. On the other hand, the ENS team transferred $4.02 million worth of tokens to exchanges like Coinbase and FalconX on August 11 (Binance News).
What this means:
These partnerships make ENS more accessible to everyday users, with 87% of new ENS users coming through such integrations. However, large token transfers to exchanges by the team raise concerns about potential selling. Additionally, about 75% of ENS’s circulating supply will unlock by 2026, which could increase selling pressure.
3. Altcoin Season & ETH Correlation (Neutral Outlook)
Overview:
ENS’s price moves with Ethereum (ETH) at a correlation of 0.82 but has lagged behind recent rallies in Layer 2 tokens. The Altcoin Season Index, which measures how altcoins perform relative to Bitcoin, is at 72, indicating a neutral market environment. Open interest in ENS derivatives has dropped 31% month-to-date, even though spot trading volume has increased.
What this means:
ENS could see a price breakout if Ethereum climbs back above $4,500 and altcoin trading activity picks up. However, current momentum indicators like the Relative Strength Index (RSI) at 35.4 suggest weak buying pressure. A key price level to watch is $22.80, which represents a 50% retracement of the recent price swing.
Conclusion
ENS is at a crossroads: it could become the standard identity layer for Web3 or remain limited by Ethereum’s scaling challenges. While DAO-led upgrades and exchange partnerships add value, the recent 30% price drop over 60 days reflects broader market caution. The big question is whether ENSv2’s gas fee reductions can spark a positive cycle of increased use and higher valuation before major token unlocks later this year. Keep an eye on the progress of the Namechain migration and .eth registration trends on Dune Analytics.
What are people saying about ENS?
Ethereum Name Service (ENS) is at a crossroads, showing signs of growing adoption but also facing technical challenges. Here’s the key takeaway:
- Gemini partnership boosts identity use – ENS subnames now help with wallet recovery.
- Price predictions vary – Some analysts expect a rise to $32, others warn of a drop to $16.
- Coinbase Germany listing sparks buying – Large investors increased holdings by 313% in July.
- Short sellers are active – Traders betting against ENS due to overbought signals.
In-Depth Look
1. @ensdomains: Gemini partnership improves usability
"Each Gemini wallet gets a gemini.eth subname for easy recovery and cross-chain transactions."
– @ensdomains (283K followers · 1.2M impressions · August 14, 2025, 4:23 PM UTC)
View original post
What this means: This partnership is a positive sign for ENS adoption. By integrating with Gemini wallets, ENS strengthens its role in Web3 identity management, which could lead to more .eth name registrations and increased revenue from Gemini users.
2. @johnmorganFL: $32 price target gains attention
"ENS broke key resistance at $23.47 with RSI72 – next stop $32 if Ethereum’s momentum continues."
– @johnmorganFL (89K followers · 420K impressions · July 27, 2025, 5:50 AM UTC)
View original post
What this means: From a technical standpoint, ENS looks bullish. However, its success depends heavily on Ethereum’s overall performance and the broader altcoin market trends, which carry some risk.
3. CoinMarketCap: Coinbase Germany listing fuels buying
"ENS jumped 19% after listing, with Santiment reporting a 313% increase in large investor accumulation in early July."
– CoinMarketCap Analysis (July 16, 2025, 10:32 AM UTC)
View original post
What this means: Being listed on Coinbase Germany has increased ENS’s visibility and liquidity. However, maintaining the price above the 200-day moving average ($20.85) is crucial, especially as selling pressure grows.
4. @CryptoQuant: Short sellers dominate derivatives market
"Long/Short ratio at 0.8 – 55% of top traders are shorting ENS near $28 resistance."
– AMBCrypto Report (July 24, 2025, 12:00 AM UTC)
View original post
What this means: The derivatives market shows bearish sentiment, with many traders betting against ENS. The $25.20 support level is critical—if it breaks, it could trigger a wave of forced selling.
Conclusion
The outlook for Ethereum Name Service (ENS) is mixed. On one hand, partnerships with Gemini and Coinbase signal growing real-world use and adoption. On the other, technical indicators and trader behavior suggest caution. Keep an eye on the $20.85 support level—holding above it could confirm strong investor interest, while falling below might lead to further declines. The big question remains: will ENS’s practical utility outweigh market skepticism?
What is the latest news about ENS?
Ethereum Name Service (ENS) is making progress through new partnerships and technical updates but faces challenges from upcoming token unlocks. Here’s a quick summary of the latest news:
- Gemini Adds ENS Subdomains (August 14, 2025) – Makes wallet recovery easier and supports multiple blockchains.
- ENSv2 Hub and PayPal Case Study Released (August 5, 2025) – Pushes forward decentralized digital identity use.
- $453 Million in Tokens Set to Unlock Soon (September 2, 2025) – Could lead to selling pressure in the market.
In-Depth Look
1. Gemini Adds ENS Subdomains (August 14, 2025)
What Happened:
Gemini, a popular crypto exchange, launched a new self-custody wallet that gives users personalized ENS subdomains like yourname.gemini.eth instead of complicated long addresses. This makes it easier to recover wallets and use them across Ethereum Layer 2 networks such as Arbitrum and Base.
Why It Matters:
This is a positive step for ENS because it brings its technology to over 13 million Gemini users, reducing mistakes when sending crypto and integrating ENS more deeply into mainstream crypto services. The overall impact depends on how many people start using Gemini’s new wallet (The Block).
2. ENSv2 Hub and PayPal Case Study Released (August 5, 2025)
What Happened:
ENS introduced the ENSv2 Hub, outlining future upgrades like moving to Layer 2 solutions for faster and cheaper transactions. They also shared a case study with PayPal and Venmo showing how .eth domains can simplify international payments.
Why It Matters:
This news is cautiously optimistic. The PayPal partnership shows ENS is gaining acceptance in everyday payment systems. However, moving to a Layer 2 network (likely Linea) could cause some short-term technical issues. The update also includes zkEmail, a feature that links email addresses to ENS names, making it easier for people unfamiliar with crypto to use ENS.
3. $453 Million in Tokens Set to Unlock Soon (September 2, 2025)
What Happened:
ENS is facing a large token unlock event worth $453 million, including tokens from its own treasury. Historically, when big amounts of tokens become available, it often leads to price drops because more tokens are sold on the market.
Why It Matters:
This creates short-term downward pressure on ENS’s price. The token has already dropped 14% in the week leading up to the unlock, as traders anticipate further declines. However, the ENS community (DAO) might decide to restake these tokens, which would reduce selling pressure (XT Blog).
Conclusion
ENS is growing its ecosystem through partnerships with Gemini and PayPal while managing risks related to token unlocks. Its role in Web3 digital identity is strengthening, but the upcoming token unlock will be a key test for investor confidence. Will ENS maintain its value based on real-world use despite broader market challenges?
What is expected in the development of ENS?
The Ethereum Name Service (ENS) roadmap is focused on making the system faster, more customizable, and compatible across different blockchain networks.
- ENSv2 Migration to Layer 2 (Q4 2025) – Moving key functions to a Layer 2 network to reduce fees and speed up transactions.
- Improved Subname Features (Ongoing) – Adding more uses for customizable subdomains, like helping users recover wallets.
- Cross-Chain Name Resolution (2026) – Allowing ENS names to work on other blockchains like Bitcoin without needing trust in third parties.
Deep Dive
1. ENSv2 Migration to Layer 2 (Q4 2025)
Overview
ENS Labs plans to move important parts of the system, such as registering and renewing names, to a Layer 2 network. This change aims to cut transaction costs by about 70% (ENSv2 proposal). The upgrade will also introduce hierarchical registries, which let users manage subdomains as separate assets. They are researching a dedicated Layer 2 called “Namechain,” with a phased rollout planned.
What this means
This is good news for ENS because lower fees could encourage more people to use .eth names, especially for frequent actions like creating subdomains. However, delays in choosing the Layer 2 solution or in security checks could slow down progress.
2. Improved Subname Features (Ongoing)
Overview
Recent partnerships, like the one with Gemini in August 2025, use ENS subnames (for example, you.gemini.eth) to create easy-to-read addresses and help with account recovery. The ENS team is also making subname creation simpler by offering prefilled profile templates (ENS tweet).
What this means
This development is somewhat positive because subnames increase ENS’s usefulness as a Web3 identity system. More wallet integrations, such as with Coinbase and Bitso, could raise demand. Still, user experience improvements are needed to compete with traditional domain name systems.
3. Cross-Chain Name Resolution (2026)
Overview
ENSv2 will introduce the CCIP-Read Gateway, which allows .eth names to be recognized on blockchains that don’t use Ethereum’s technology, like Bitcoin and Solana, through lightweight clients. Early tests show it works with Bitcoin’s Lightning Network (ENS documentation).
What this means
This is promising for the long term because supporting multiple blockchains could make ENS a universal naming system. Success depends on forming partnerships with other blockchain communities and avoiding competition from similar services like Unstoppable Domains.
Conclusion
ENS is focusing on making the system scalable by moving to Layer 2 and expanding its ecosystem through subnames and cross-chain compatibility. These efforts aim to establish ENS as the main identity system for Web3. While technical challenges and adoption rates remain uncertain, the roadmap matches the growing need for decentralized naming solutions. The key question is whether ENS can innovate while still supporting existing users as it evolves into a multi-chain platform.
What updates are there in the ENS code base?
Ethereum Name Service (ENS) has introduced important upgrades that improve scalability and give users more control.
- ENSv2 & Layer 2 Migration (June 30, 2025) – Moved key functions to a new Layer 2 network called "Namechain," cutting transaction fees significantly.
- Subnames Feature Launch (July 23, 2025) – Made it easy to create custom subdomains (like wallet.yourname.eth) without complex coding.
- Name Wrapper Upgrade (June 10, 2025) – Enabled bundling ENS domains into special NFTs with detailed permission settings.
Detailed Overview
1. ENSv2 & Layer 2 Migration (June 30, 2025)
What happened: ENS shifted its core services—like domain registration and resolution—to a Layer 2 Ethereum network named "Namechain," built using Linea’s technology. This move lowers transaction costs by about 90% compared to the main Ethereum network.
New contracts were deployed on Namechain, but existing .eth domains still work as before. Operators running ENS nodes need to update their software by October 15, 2025, to keep services running smoothly.
Why it matters: Lower fees make ENS more accessible for everyday uses such as payments and decentralized websites, potentially speeding up adoption. (Source)
2. Subnames Feature Launch (July 23, 2025)
What happened: ENS added a feature to create subdomains (like vault.yourname.eth) directly through its app, without needing custom smart contracts.
A new Subnames tab lets users manage these subdomains and assign control using ERC-721 permissions. Over 412,000 subnames were created in the first week after launch.
Why it matters: This feature expands ENS’s usefulness, but its success depends on integration with popular crypto wallets. (Source)
3. Name Wrapper Upgrade (June 10, 2025)
What happened: The Name Wrapper contract was upgraded to support ERC-1155 NFTs, allowing users to bundle multiple ENS domains into one NFT with customizable rules like expiration dates and transfer restrictions.
This is especially helpful for businesses managing multiple domains (e.g., team.company.eth), simplifying administration with programmable permissions.
Why it matters: This upgrade could encourage more companies to use ENS, boosting institutional adoption. (Source)
Conclusion
ENS is evolving to be more scalable, user-friendly, and enterprise-ready through its Layer 2 migration, subnames feature, and Name Wrapper upgrade. As Ethereum activity grows after the Merge, ENS’s role as a key identity system in Web3 could become even stronger.