Ethereum Navigates Uncertainty Ahead of Major Network Upgrade

Ethereum finds itself in a contradictory market position. On-chain metrics are hitting record levels, yet the price action tells a different story, lagging behind Bitcoin and wrestling with key technical levels. This complex setup emerges just ahead of the scheduled launch of the new MegaETH mainnet, with long-term holders and even sovereign states accumulating despite near-term chart warnings.

The network's fundamental health presents a stark contrast to its price performance. The daily transaction count, nearing an all-time high at approximately 2.8 million, underscores robust usage. This activity surge is partly attributed to the effective "Fusaka-Upgrade" implemented in December, which reduced data costs via PeerDAS. While some volume stems from automated micro-transactions, overall network demand remains elevated.

An even more compelling signal of long-term conviction is the staking landscape. A record 36 million ETH is now locked in the network, representing nearly 30% of the entire circulating supply. This substantial capital removal significantly constrains the liquid supply available on exchanges, a factor that could act as a powerful price catalyst should investor demand return.

Price Action Under Pressure

As the world's second-largest cryptocurrency, Ethereum is facing headwinds from broader geopolitical tensions weighing on risk assets. From a technical perspective, the $3,100 support level is critical. Market analysts caution that a sustained break below this threshold could pave the way for a deeper correction toward the $2,800 zone.

Should investors sell immediately? Or is it worth buying Ethereum?

Sellers currently hold sway below the 50-day moving average. To shift momentum, the price would need to reclaim and hold above the $3,250 resistance level. At present, Ethereum is trading at $3,106.50, exhibiting mild underperformance relative to the wider digital asset market.

Institutional and Sovereign Accumulation Continues

Large-scale investors appear to be viewing the current price weakness as a buying opportunity. Recent data shows Ethereum spot ETFs have attracted net inflows of just under $149 million.

Notably, the Kingdom of Bhutan has made a strategic move. The nation's sovereign investment arm recently staked an additional 320 ETH through provider Figment. This action highlights a growing trend of state-level entities treating Ethereum as a strategic reserve asset, moving beyond mere speculative interest.

All eyes are now turning toward a key date: Thursday, January 22, 2026. The anticipated launch of the "MegaETH" Layer-2 mainnet is slated for this day. Designed to process up to 100,000 transactions per second, this technical milestone has the potential to reinvigorate the DeFi and gaming ecosystems on Ethereum, potentially setting the tone for market sentiment throughout the first quarter.