Ethereum’s Paradox: Network Activity Soars Amid Price Correction

The opening weeks of 2026 present a contradictory picture for Ethereum. As its market price undergoes a correction in line with the broader digital asset sector, the blockchain's underlying fundamentals are demonstrating remarkable strength. This divergence between subdued valuation and surging on-chain metrics is prompting a reassessment of the asset's near-term prospects.

A significant catalyst for the network's robust performance is the successful "Fusaka" upgrade deployed in December 2025. Innovations such as PeerDAS have substantially increased capacity for Layer-2 scaling solutions while reducing transaction costs. This progress validates the core development strategy of shifting execution to secondary layers while maintaining Ethereum's mainnet as a secure settlement base.

This technical advancement is being matched by growing institutional engagement. U.S. spot Ethereum ETFs recorded net inflows exceeding $168 million this week alone. Furthermore, major financial institutions are progressively enabling their advisory networks to offer crypto asset allocations, reinforcing Ethereum's standing as an established investment class.

Record-Breaking Network Fundamentals

In stark contrast to the hesitant price action, the network's operational metrics have hit unprecedented levels. Recent on-chain data reveals the Ethereum blockchain processed over 2.23 million daily transactions, surpassing even the peak levels witnessed during the 2021 bull market.

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

Two additional factors underscore this fundamental health:
* Expanding Ecosystem Value: The total value locked (TVL) in decentralized finance (DeFi) protocols has increased by more than $6.5 billion since January. This indicates capital remains committed to the ecosystem despite price volatility.
* Supply Constriction: Exchange reserves have plummeted to multi-year lows. Investors are increasingly opting to move their holdings into self-custody or stake them, rather than keeping them readily available for sale.

Technical Price Battle and Market Sentiment

The price of the world's second-largest cryptocurrency is currently facing headwinds, struggling to reclaim higher trading levels. Despite a year-to-date gain of 5.76 percent, a defensive short-term sentiment has taken hold across the market. Traders are closely monitoring a crucial support zone between $3,100 and $3,120.

The present pullback mirrors a corrective phase affecting other major assets like Bitcoin. Derivatives market data suggests the unwinding of leveraged long positions has contributed to recent volatility. Nevertheless, many market analysts continue to interpret the overall structure as a long-term accumulation phase.

The current landscape is therefore defined by a clear dichotomy: short-term macroeconomic uncertainties are applying downward pressure on the spot price, while the long-term adoption trajectory appears firmly intact. Whether the $3,100 support level holds is likely to dictate near-term direction. Meanwhile, the development community is already focusing on the planned "Glamsterdam" upgrade slated for mid-2026, aimed at delivering further network optimization.