Ethereum, the second-largest cryptocurrency, spent most of 2026 under pressure amid the broader market downturn. Its market capitalization stood at roughly $230 billion.
$ETH reached an all-time high of $4,953 on the 24th of August 2025. It has since fallen to $1,888, representing an approximately 62% decline from its record high.
Separately, $ETH remained down 36% on a year-to-date basis.
Is $ETH undervalued?
Despite the token’s troubled run, activity across the Ethereum network continued expanding.
Alphractal data showed that Daily Transactions remained above 2.5 million during most of the recent period. The network processed 2.56 million transactions at press time.
By comparison, Daily Transactions remained below 1.5 million during much of last year.
Even when Ethereum reached its all-time high in August, the network processed approximately 1.6 million transactions daily.
Alphractal’s João Wedson, speaking on the development, pointed to those fundamentals as the core reason Ethereum trades well below fair value. He noted,
You may be bearish on the price, but you cannot be bearish on the fundamentals and the actual adoption of the blockchain.
Wedson expects the same fundamentals to drive Ethereum’s outperformance in the coming market cycle, a move he sees playing out over the “next two to three years.”
Is more capital entering Ethereum?
A closer look shows Ethereum still drawing capital into its ecosystem, even with the token’s weak showing in the market.
DeFiLlama data shows the blockchain’s total value locked climbing as investors commit capital to the network. Between 1 July and now, TVL has absorbed $4.92 billion in fresh locked capital.
Capital lock-ups on that scale usually reflect long-term optimism on price performance, with the same group also earning the APY on offer.
Daily Active Users have surged alongside the inflows, pointing to higher on-chain activity and reinforcing Ethereum’s role as the settlement layer for most transactions on the chain. Artemis reported the latest daily active user count reaching 581,000, one of the highest readings since late June.
Continued growth across Daily Transactions, TVL, and Daily Active Users could strengthen Ethereum’s underlying demand.
Validator conviction adds to the outlook
AMBCrypto reported recently how zero exit queues from Ethereum validators could be another factor allowing the asset to swing higher.
Validators are holding their $ETH on the network, a decision usually tied to a long-term view. The behaviour breaks from the pattern seen when the market crash peaked, when the validator exit queue held roughly 2.6 million $ETH and carried a 44-day wait.
Adding weight to the shift, the number of validators looking to commit tokens to the blockchain has jumped to roughly 2.52 million $ETH, with a 43-day waiting period.
Final Summary
- Ethereum’s rising network activity contrasted sharply with $ETH’s 36% year-to-date decline.
- Validator demand strengthened as Ethereum’s Exit Queue fell close to zero.
