Why is Crypto Crashing? Ethereum’s Real Momentum Is Getting Missed

Ben Graham · 5 horas atrás

Ethereum continues to build long-term value even as its price struggles to reflect the progress. SharpLink CEO Joseph Lubin recently highlighted this disconnect: Ethereum keeps delivering on core upgrades and adoption milestones, yet short-term traders remain focused elsewhere. So why is crypto crashing despite wider adoption and normalisation?

JOSEPH LUBIN:

“Ethereum is the ultimate institutional asset.”

Every signal is screaming the same thing:
Smart money isn’t experimenting with ETH they’re positioning around it.$ETH isn’t just crypto.
It’s becoming infrastructure. pic.twitter.com/iEybl9hhAT

— BMNR Bullz (@BMNRBullz) November 26, 2025

Ethereum remains the leading platform for decentralized applications, powering automated financial tools and smart contracts that operate without intermediaries. The network’s major liquidity overhang from staked ETH was resolved back in 2023 with the Shanghai upgrade.

That change allowed users to unstake and withdraw their ETH freely. Around 5% of validators exited at the time, with withdrawal queues stretching up to 17 days, but the anticipated mass sell-off never materialized. Today, staking offers yield while still providing exit flexibility, turning ETH into a more practical, income-generating asset rather than a locked commitment.

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Why Is Crypto Crashing When Ethereum Activity Keeps Rising?

Recent network upgrades have accelerated momentum. The Fusaka upgrade in late 2025 significantly increased data availability, reduced transaction costs, and drove activity to new highs. Daily transactions reached a record 2.9 million in mid-January 2026, almost double the previous year’s average, while average fees fell to multi-year lows around $0.15.

Ethereum onchain activity and volume — **(Source: The Block)**

Looking forward, the Glamsterdam upgrade (expected in the first half of 2026) will improve execution efficiency and proposer-builder separation, followed by Hegota later in the year, which targets state growth management and long-term node sustainability.

The Ethereum Foundation is also investing heavily in post-quantum cryptography research, with a dedicated team and $2 million in prizes to ensure future security.

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Institutions Quietly Moved Closer to Ethereum

Institutional interest has grown steadily behind the scenes. Spot Ethereum ETFs, launched in 2024, gave traditional finance a regulated on-ramp to ETH exposure. The iShares Ethereum Trust (listed on Nasdaq in July 2024) later added in-kind redemptions, reducing barriers for large capital flows.

Tokenization of real-world assets continues to gain traction on Ethereum, positioning it as the preferred base layer for institutions converting equities, bonds, and other assets into blockchain tokens.

In early 2026, 82% of surveyed institutional investors expressed plans to increase ETH exposure. Firms like Bitmine have made sizable purchases, adding over $116 million in ETH and staking a large portion for yield, while more than 35 major players have expanded deployments on the network in recent months.

Whales are also voting with their wallets. After a recent 15% correction, large holders accumulated more than $1 billion in ETH. One wallet alone acquired 70,000 ETH (worth roughly $203 million) in a short window. A high-profile example is World Liberty Financial (WLFI), the Trump-linked DeFi initiative, which rotated $8 million from Wrapped Bitcoin into 2,868 ETH, signaling a strategic shift toward Ethereum’s staking rewards and on-chain utility.

TRUMP-BACKED $WLFI DUMPS BITCOIN FOR ETHEREUM

World Liberty Financial sold 93.77 $WBTC (~$8.1M) to buy 2,868 $ETH at $2,813.

Big rotation into $ETH. pic.twitter.com/JoFgP0hsrb

— Karan Singh Arora (@thisisksa) January 26, 2026

So, Why Doesn’t The Price Reflect This?

(Source: TradingView)

ETH trades in a range of $2,800–$3,000, down 11% over the past week and 40% from its all-time highs. The token has been consolidating with resistance near $3,000–$3,010 and support at $2,800–$2,860 following the pullback.

Why is crypto crashing and ETH’s price slowly plummeting? Negative funding rates, ETF outflows in some periods, and broader macro caution (higher rates, tariff concerns, and Federal Reserve policy uncertainty) have kept short-term sentiment suppressed. You can see the tension in Ethereum ETF outflows and negative funding rates. Traders bet against ETH while builders keep shipping upgrades.

This gap between fundamentals and price creates a classic setup. If ETH breaks above $3,010 with conviction, it could target $3,350–$4,000 in the coming months, aligning with analyst forecasts for $4,000+ in 2026 as upgrades roll out and institutional flows accelerate.

A failure to hold $2,800 might test lower levels around $2,622, but shrinking supply from staking, whale buying, and rising network activity point toward eventual upside.

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