As of July 1, 2026, according to Gate market data, ETH is trading around $1,580, fluctuating near the price range seen at the start of 2021. This means that most of the gains from the past five years have been erased. Even more noteworthy, Ethereum has closed lower for three consecutive quarters—Q4 2025, Q1 2026, and Q2 2026—for the first time since its mainnet launch in 2015. This rare historical trend is profoundly impacting the cost structure of long-term holders and has sparked a renewed debate about the relationship between ETH’s fundamentals and its price.
What Does Three Consecutive Losing Quarters Mean in Ethereum’s History?
Since its inception in 2015, Ethereum has weathered the 2018 bear market, the liquidity crisis of March 2020, the policy shocks of May 2021, and the FTX collapse in 2022, among other extreme market events. Yet, in none of these downturns did Ethereum record three straight quarters of losses.
This current decline stands out both in depth and duration. In Q4 2025, ETH dropped 28.28% for the quarter. The decline widened to 29.26% in Q1 2026, and Q2 2026 closed down between 24.79% and 25.65%. Over these three quarters, ETH fell nearly 70%, with the ETH price plunging from a high of about $4,950 to around $1,600.
Historically, double-digit quarterly declines are not uncommon for Ethereum. However, three consecutive quarters of double-digit losses, with no sign of the decline abating, points to persistent selling pressure rather than a one-off capitulation. This structural difference suggests the current downturn is not driven by a single black swan event, but rather a systemic revaluation.
How Are Long-Term Holders Faring in Terms of Cost Distribution and Losses?
On-chain data provides a quantifiable view of long-term holders’ positions. According to Glassnode, currently only about 11% of ETH’s circulating supply is in a 3x profit position—the lowest level since February 2017. By comparison, during the 2017 and 2021 bull markets, over 50% of supply was at 3x or greater profit. In this cycle, the metric hasn’t even reached the 30% threshold.
What’s even more significant is that ETH’s current profit compression is worse than during the bear markets of 2019 and 2022. This means that, even by historical bear market standards, long-term holders are now facing unusually steep unrealized losses.
Short-term holders are also under pressure. Ethereum’s 30-day MVRV ratio is currently -12%, indicating that investors who bought in the past month are, on average, sitting on a 12% unrealized loss. When MVRV remains negative, it typically signals a capitulation phase, where selling pressure may gradually subside as weaker hands exit the market.
Looking at realized price across various timeframes, most buyer cohorts are now underwater. This "universal loss" pattern has historically preceded panic selling by long-term holders, but it can also signal that the market is nearing a bottom—provided the fundamentals are strong enough to support it.
Why Is On-Chain Activity Diverging from ETH Price Action?
While ETH’s price continues to fall, Ethereum’s on-chain activity tells a very different story. In January 2026, Ethereum averaged about 927,842 daily active addresses, peaking at 1.3 million. This figure not only far exceeds the 800,000 peak during the 2021 bull run, but also the 720,000 high seen in 2018.
On the transaction front, Ethereum’s average daily transaction count in 2026 rose to 2.05 million, a 31% increase from mid-2025. The mainnet processed as many as 2.9 million transactions in a single week, setting a new record. Meanwhile, average network fees have remained low, between $0.10 and $0.20.
This rare combination of "high activity, low fees" is almost unprecedented in Ethereum’s history. In past periods of network congestion, surging transaction volumes always drove gas fees higher. The current low-fee environment is the result of multiple recent protocol upgrades—including the Fusaka upgrade introducing PeerDAS technology and increased Blob capacity—which have significantly enhanced the network’s data throughput.
The divergence between on-chain activity and price essentially reflects two different signals: activity measures Ethereum’s real-world usage as infrastructure, while price is more influenced by macro liquidity, market sentiment, and capital flows. The two don’t always move in tandem.
Is Layer 2 Scaling Changing ETH’s Value Capture Logic?
The rapid evolution of the Layer 2 ecosystem is one of the most significant structural changes in Ethereum’s fundamentals. As of early 2026, total value locked (TVL) across Ethereum Layer 2s has surpassed $28 billion. L2 networks now process 95% to 99% of all Ethereum transactions. In terms of scaling, L2’s aggregate expansion factor is now more than 100 times that of the mainnet.
However, L2’s explosive growth has sparked new debates: as more transactions migrate to L2, is ETH’s value capture as the "settlement layer asset" being diluted? While L2’s low-fee environment improves user experience, it also reduces fee burn on the mainnet, which in turn affects ETH’s deflationary narrative.
On the other hand, the maturation of the L2 ecosystem is opening up broader use cases for Ethereum. In 2026, blockchain technology is making inroads into real-world sectors like supply chain and energy as "trusted infrastructure." This shift from "niche financial use cases" to "industrial infrastructure" could provide a fundamentally different long-term value proposition for ETH compared to previous cycles.
What Are Institutional Behaviors Signaling During This Downturn?
Against a backdrop where retail and long-term holders are under pressure, institutional behavior is showing divergence rather than uniformity.
On one hand, some institutions are exiting. On June 30, 2026, treasury management firm FG Nexus liquidated all 50,770 of its ETH holdings, with an average entry price of about $3,860 and total realized losses exceeding $85 million.
On the other hand, some institutions are buying the dip. BitMine recently invested $43 million to acquire 27,084 ETH, bringing its total holdings to 5.7 million ETH, or 4.7% of total supply. Its average entry price was exactly $1,569. On the same day, publicly traded company SharpLink also added 10,000 ETH to its holdings, going against the market trend.
Such opposing moves at the same price level highlight a deep divide among institutions regarding Ethereum’s long-term value. As market maker Wintermute put it, "The bear market is in its later stages, but it’s hard to say if we’ve seen the real bottom." This cautious outlook underscores the current lack of consensus in the market—a lack of consensus that often sets the stage for major turning points.
Is the Gap Between ETH Fundamentals and Price Sustainable?
The core issue facing Ethereum now is this: is the divergence between improving fundamentals and falling prices temporary, or does it signal a deeper structural shift?
From a network usage perspective, daily active addresses have surpassed 1.3 million, transactions are at record highs, and L2 TVL is over $28 billion. These metrics all point to one conclusion: Ethereum’s adoption as blockchain infrastructure is still expanding. On the supply side, ETH held on exchanges has dropped to about 14.5 million, a historic low, indicating that the market is not experiencing mass panic selling. Instead, accumulation appears to be underway.
Yet from a price perspective, ETH has fallen back to early 2021 levels, long-term holders are deeply underwater, and quarterly declines have set new records. This disconnect suggests that current prices are being driven more by macro liquidity tightening and declining risk appetite than by any deterioration in network fundamentals.
Historically, periods of significant divergence between asset prices and fundamentals are rarely the end of the story. Instead, they mark a window for market repricing. When fundamental indicators keep improving even as prices fall, the gap must eventually close—either fundamentals deteriorate to meet prices, or prices recover to reflect fundamentals.
Conclusion
From Q4 2025 through Q2 2026, Ethereum posted three consecutive quarters of losses—down 28.28%, 29.26%, and roughly 25%, respectively—for the first time since the mainnet went live in 2015. The price dropped from about $4,950 to around $1,600, retracing to levels last seen in early 2021. Long-term holders are facing widespread losses, with only 11% of circulating supply in a 3x profit position, the lowest since 2017.
However, on-chain data paints a very different picture: daily active addresses have surpassed 1.3 million, setting a new all-time high; Layer 2 TVL has exceeded $28 billion; and ETH balances on exchanges have dropped to historic lows. Network activity and adoption continue to expand, even as prices remain under pressure.
This gap between fundamentals and price is Ethereum’s defining market feature today. It reflects both the systemic pressure on risk assets from the macro environment and raises a key question: as network usage keeps growing while prices fall, is the market’s pricing mechanism failing, or is it simply preparing for a longer-term revaluation?
Frequently Asked Questions (FAQ)
Q: Is this the first time Ethereum has posted three consecutive quarters of losses?
Yes. Since Ethereum’s launch in 2015, it has weathered multiple bear markets, but never before has it recorded three straight losing quarters. Q4 2025 (-28.28%), Q1 2026 (-29.26%), and Q2 2026 (about -25%) mark the first such streak in history.
Q: What is the current loss situation for long-term holders?
According to on-chain data, only about 11% of ETH’s circulating supply is in a 3x profit position—the lowest since February 2017. The 30-day MVRV ratio stands at -12%, indicating that recent buyers are, on average, down 12%. Most buyer cohorts across timeframes are currently underwater.
Q: What is the current ETH price?
As of July 1, 2026, according to Gate market data, ETH is trading around $1,600, having retraced to levels last seen in early 2021.
Q: Why is there a divergence between on-chain activity and price?
Ethereum’s daily active addresses have surpassed 1.3 million, a new all-time high and above the 2021 bull market peak. The continued price decline mainly reflects tighter macro liquidity and reduced risk appetite. On-chain activity measures real network usage, and the two are driven by different factors—they don’t always move in sync.
Q: What does Layer 2 development mean for ETH?
Layer 2 TVL has exceeded $28 billion, now handling 95% to 99% of Ethereum’s transactions. L2 scaling has greatly improved network scalability, but it has also sparked debate about ETH’s value capture. Overall, the maturity of the L2 ecosystem is opening up broader adoption scenarios for Ethereum.
