Recent ETH market conditions have been quite tough. We've even seen it dip below $1900, and honestly, the start of this year has been quite challenging performance-wise. A decline of over 60% from the peak in 2025 naturally cools market sentiment significantly. Looking at the movement around $1922, I feel we're really in the stage of probing for a bottom.

Personally, as I've repeatedly mentioned within the community, the chart movements are almost exactly as expected. The recent decline following a sharp drop and sideways movement aligns perfectly with the final correction phase that was entirely anticipated from a technical perspective. If you review the trends from 2022 again, you'll see this should truly be the last downturn.

What’s important here is that macro figures tell a completely different story. The daily active addresses on the Ethereum mainnet are consistently between 550k and 700k, with a new high approaching and surpassing 1 million in January and February. The 7-day and 30-day moving averages are still maintaining an upward trend, indicating that actual user activity and DApp engagement continue to grow.

There are also interesting movements in trading volume. On February 7, the daily trading volume hit a record high of $550k, and on February 22, it remained above $1.7 million. The overall trading volume at the start of the year has recovered significantly compared to the same period last year, mainly driven by stablecoin and Layer 2 activity.

The total supply of stablecoins on the ETH chain has reached about $15.8 to $18.3 billion, accounting for over 50% of the global total. Since 2025–2026, this has been steadily increasing and hitting new highs, so the growth of stablecoins shows no signs of stopping.

Even more critically, the amount of ETH held in exchange reserves is decreasing rapidly. The total ETH reserves across all exchanges have fallen to 16.2 million ETH, the lowest since 2016. With net outflows expected to continue into early 2026, supply-side pressure is definitely easing. When combined with staking lock-ups, the effective circulating supply has shrunk significantly, with over 45% of ETH being non-liquid. While this puts short-term downward pressure on prices, the network’s fundamentals are on the brink of a major breakout.

While small investors panic, institutional investors are acting differently. Capital inflows into ETFs have resumed, and companies are buying more ETH at these low levels. Traditional financial institutions are also continuing to offer tokenized products on Ethereum. Although the overall net outflow in January was $700k, on February 17 alone, there was a net inflow of $48.63 million, with BlackRock-related ETFs seeing a single-day inflow of $22.89 million. On February 13, inflows turned positive again with $10.26 million, confirming multiple instances of net positive inflows. The total AUM has exceeded $11.5 billion, clearly indicating that institutions are re-entering around the $1900 mark.

Looking at the 2026 roadmap, ambitious plans are in place. These include raising the gas limit, enhancing Layer 2 interoperability, expanding zero-knowledge infrastructure, account abstraction, and implementing quantum-resistant security. For Layer 1, upgrades such as post-quantum cryptography, FOCI censorship resistance, and network resilience testing are scheduled. Vitalik has emphasized that “UX and security are not a trade-off but security-enhanced UX.”

If macro stability and capital flows are maintained, ETH doesn’t necessarily need hype; a simple revaluation could be enough for significant gains. This isn’t blind optimism but a conviction that the winter marks the beginning of the greatest rebound.