This is one of the most frustrating paradoxes of 2026. On the one hand, Ethereum has never been so institutionally adopted: Banque de France, Société Générale, UBS are actively migrating segments of the $12.5 trillion repo market onto the public blockchain, BlackRock has just launched its stakable ETHB ETF, and the Ethereum Foundation made its biggest staking deposit in history at the end of March. On the other, ETH is painfully trading around $2,327, some 52% below its October 2025 peak of $4,831. Something's not quite right. 🚀
🔍 What's going on?
Let's go over the chronology again. After peaking at $4,831 in October 2025, ETH began a brutal descent: below $3,500 in November, below $3,000 in December, and dry capitulation to an annual low of $1,473 in early February 2026. The worst ETH drawdown since the FTX collapse. Since that low, ether has rebounded by around 58%, but remains a long way from the highs, stuck in a tight range between $2,000 and $2,500.
On April 6, ETH surged to $2,130 (+3.7% on the session) on rumors of a US-Iran ceasefire, slightly outperforming Bitcoin (+3%). Interesting detail: 273.8 million positions were liquidated in 24 hours, with a shorts/longs ratio of almost 3 to 1. Social sentiment is at an all-time negative low - historically, this kind of extreme is more of a contrarian signal that precedes dry recoveries.
On the infrastructure side, the Fusaka upgrade passed in December 2025 with its center of gravity: EIP-7594, better known as PeerDAS. In practice, this allows validators to check large blobs of data by sampling instead of downloading everything, pushing down costs on Layer 2 even further. The capacity of blobs per block is set to rise from 6 to 21 by the end of 2026. And the next big step is Glamsterdam, expected in the coming months and touted as a major potential catalyst.
On the Layer 2 side, the numbers are impressive: Arbitrum dominates with $16.84 billion of Total Value Secured (February 2026), followed by Base at $10.72 billion and Optimism around $8 billion. L2 transactions far exceed the mainnet, and fees have fallen by more than 90% since Dencun.
💡 Why does it matter?
And that's exactly where the trap lies. The success of Layer 2 - which was supposed to be Ethereum's big win - has become one of the main reasons for the underperformance of the ETH price. The mechanism is simple: when activity migrates to L2s, the mainnet burns less ETH (EIP-1559 mechanism), generates fewer fees, and the "ETH = ultrasound money" argument takes a beating. L2s do pay something to Ethereum for data availability, but at such reduced amounts since Dencun and Fusaka that it doesn't make up for the loss of L1 activity.
This is what analysts are now calling "narrative Layer-2 competition" - and it's cited as one of the three main drivers of the 2025-2026 ETH drawdown, alongside the Iran/Hormuz oil shock and the restrictive macro context. Vitalik Buterin himself acknowledged at the start of the year that we needed to rethink the division of value between L1 and L2.
But - and this is where it gets interesting - this price weakness masks an adopting reality that is tipping. The Banque de France, SocGen and UBS migrating from institutional repo to Ethereum isn't a pilot, it's operational deployment on the market that serves as the daily plumbing for global banks. The Foundation deposited 22,517 ETH at once on the Beacon Chain on March 30 (~$46 million), its largest stake in history. BlackRock obtained its stakable ETHB. Sharplink Gaming holds 797,704 ETH in cash. Sovereign wealth funds taking a serious look.
Bref, we're in a "fundamentals improving, price not following" pattern. This is exactly the kind of divergence that historically ends up being resolved - the only question is in which direction and when.
📊 Our view
On this dossier, we're skeptical in the short term and constructive in the medium term. What we don't like: ETH is technically stuck below its 200-day moving average around 3,500, retail sentiment is at a standstill, and as long as the situation in the Middle East remains tense, risky assetsˊsvontcontinueraˋsuffer.BuyETHnowbettingonarapidreturnaˋ4000, retail sentiment is at the mat, and as long as the situation in the Middle East remains tense, risky assets will continue to suffer. Buying ETH now by betting on a quick return to 4,000 ,retail sentiment is on the mat,and as long as the situation in the Middle East remains tense, risky assetsˊsvontcontinueraˋsuffer.BuyingETHnow by betting on a quick return toˋ4000 is fighting the trend.
What we like: current levels (around $2,300) represent a massive discount to the network's fundamental value, and institutions aren't buying to sell in three months - they're building for five to ten years. If Glamsterdam delivers something that rebalances the L1/L2 value split (and this is one of the central topics of the roadmap), the narrative can shift very quickly. And historically, the "everyone hates ETH" phases have been excellent entry points.
Our tactical reading: we're not buying everything at once, we're building in progressive DCA on the $2,000-$2,200 zones, we're saving dry powder for a possible test of the February low if the macro continues to deteriorate, and we're watching two things like milk on fire - the official Glamsterdam announcement, and the break of $2,500 which would be the first real technical reversal signal. Above $3,000, we'd really start talking about a trend reversal.
For long-term positions already open, we're not touching anything. For new entrants, this is exactly the kind of area where you have to accept that you might not be right right away.
✅ To remember
ETH around $2,327, around -52% below October 2025 ATH ($4,831)
Annual breakout hit at $1,473 in early February, +58% since
Upgrade Fusaka (December 2025): PeerDAS, further L2 cost reduction
Next step: Glamsterdam, major potential catalyst
TVL Layer 2: Arbitrum $16.84bn, Base 10.72bn,Optimism8bn, Optimism 8bn ,Optimism8bn
Institutional adoption: Banque de France, SocGen, UBS on Ethereum repo
Ethereum Foundation staked 22,517 ETH on March 30 (all-time record)
Levels to watch: resistance $2,500 then $3,000,support2000, support 2,000 ,support2000
And you, are you more team "ETH is at a historic entry point thanks to institutions" or team "as long as L2s cannibalize L1, the price won't take off"? This paradox clearly shares the community.
🔎 Also to be read
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