Ethereum’s Strange Q1: Record Usage, Yet ETH Still Fell Hard

Ethereum fell 32.8% in Q1 despite record network usage as liquidations, L2 shifts, and macro fears pressured ETH.

Ethereum ended the first quarter of 2026 with a sharp 32.8% loss, even as on-chain activity reached record highs. 

Data shared by CryptoRank showed the contrast clearly. March closed with a 1.3% gain, yet that small recovery failed to offset the heavy damage from January and February. The quarter’s high reached $3,385, while the low touched $1,760. 

According to CoinGecko data, ETH later traded at $2,020.55, up 1.61% in 24 hours but still down 6.42% on the week.

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Ethereum Price Drop in Q1 2026

CryptoRank reported that February’s AI sector sell-off played a major role in Ethereum’s decline. The platform noted that ETH traded like a tech proxy during the broader risk reset. 

As AI-related tokens and equities weakened, Ethereum followed the same path lower.

The selling pressure intensified after leveraged long positions began to unwind. 

More than $5.4 billion in long liquidations reportedly hit the market. That cascade pushed ETH from around $3,000 to as low as $1,473 during the worst stretch of the quarter.

Besides that, broader macro fears added pressure. 

CryptoRank pointed to the Iran-Hormuz oil shock as another catalyst. Rising oil prices fueled stagflation concerns, which triggered a wider move away from risk assets, including cryptocurrencies.

Ethereum Network Usage Hits Record Highs

Despite the price decline, Ethereum’s network activity reached all-time highs during the quarter. 

CryptoRank highlighted this unusual divergence on social media, showing that usage strength did not translate into price support.

A key reason came from layer-2 migration. 

As more activity moved to L2 networks, the amount of ETH burned through base-layer fees dropped sharply. Consequently, Ethereum quietly shifted back into an inflationary state, reducing one of the major bullish supply narratives that supported earlier rallies.

This disconnect left traders focused more on capital flows than chain growth. 

Funds rotated into traditional safe-haven assets such as gold and oil instead of crypto. Hence, strong usage metrics alone failed to change short-term market direction.

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ETH/BTC Level Signals Key Altcoin Strength Zone

Market analyst Daan Crypto Trades also highlighted Ethereum’s position against Bitcoin. 

In their X post, the analyst noted that ETH remained around the 0.03 ETH/BTC level, which continues to act as an important base.

According to the analyst, a move above 0.032 would place bulls back in stronger control. That level could also open the door for Ethereum and other altcoins to outperform Bitcoin for a period.

However, the analyst added that Bitcoin still needs to show more strength first. Until that happens, the broader downtrend keeps traders cautious. 

For now, Ethereum’s record usage and weaker quarterly price action continue to define one of the market’s strangest starts to a year.

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