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Ethereum has shown strong momentum in adoption, despite weak market conditions in the first quarter.
In Q1 2026, Ethereum performed mixed, with cryptocurrency prices falling, impacting several key DeFi metrics, while network adoption and tokenized asset growth continued to strengthen. Data from Token Terminal indicates that lending activity, decentralized exchange trading volume, and fee generation declined during the quarter, reflecting overall market weakness. However, Ethereum still maintains its dominance in major blockchain sectors.
Total Value Locked (TVL) on Ethereum decreased by 11% quarter-over-quarter to $316.2 billion, as falling asset prices reduced the capital deployed within the ecosystem. Even with the pullback, Ethereum remains the largest smart contract network, with TVL far exceeding the combined total of its closest competitors.
DeFi activity gradually waned throughout the quarter. Active loans averaged $21.8 billion, down 16.6% from the previous quarter, mainly due to reduced activity on Aave. Decentralized exchange trading volume also declined, dropping to $134.5 billion, as traders reduced risk exposure amid market uncertainty. Despite the slowdown, Ethereum continues to lead in lending and remains one of the most active chains for decentralized trading.
One of the most notable growth areas comes from tokenized real-world assets. The value of tokenized assets on Ethereum reached $203.4 billion, up nearly 43% from a year earlier. Stablecoins remain the largest segment, with tokenized funds and commodities also steadily growing. Tokenized gold products performed particularly well, driving a 60% increase in tokenized commodities during the quarter.
Network activity showed stronger momentum. Monthly active addresses rose to a record 13.2 million, and transaction volume surged to over 200 million transactions within the quarter. With the Fusaka upgrade, throughput also hit a new high of 25.78 transactions per second, demonstrating continuous improvements in Ethereum’s scalability and user adoption.
Meanwhile, transaction fees dropped significantly, and increased network efficiency lowered user costs. Although the short-term reduction in fees decreased protocol revenue, it also promoted broader ecosystem usage and supported long-term network growth.
Despite Ethereum’s fully diluted valuation declining with the overall market adjustment, staking participation continued to rise. The share of staked ETH increased, indicating investor confidence in the network despite short-term price volatility.
ETHUSDT Daily Technical Analysis
Despite rebounding from a recent low near $1,500, Ethereum remains in a bearish trend on the daily chart. Earlier this year, it broke below the key support zone at $2,100, with market structure clearly favoring sellers.
The latest rebound improved short-term sentiment, but the price action still appears to be a relief rally within a broader downtrend. Buyers need to reclaim key resistance levels to consider a sustainable trend reversal.
The first resistance zone is between $1,800 and $1,900. A successful break above this area could open the way toward the $2,110 to $2,220 resistance zone. Further upside targets include the major supply zone from $3,888 to $2,465, which previously experienced strong selling pressure.
On the downside, immediate support remains around $1,500, followed by a strong demand zone near $1,385. Breaking below these levels could trigger another wave of selling, extending the broader correction.
Momentum indicators are recovering from oversold conditions, suggesting buyers are attempting to regain control. However, unless Ethereum can reclaim higher resistance zones and establish a series of higher highs and higher lows, the overall market structure remains bearish.
Outlook
Ethereum’s fundamentals continue to improve through increased adoption, growth in tokenized activities, and expanded network usage. However, technicals remain fragile. As long as ETH trades below the resistance zone of $1,900–$2,100, rebounds may face selling pressure. Sustained breakout above $2,100 would strengthen the recovery outlook; conversely, breaking below $1,500 could expose the market to further downside risks.
$ETH