A new report from Goldman Sachs highlights a sharp divergence between Ethereum’s market price and its underlying network health.
While ETH has experienced significant price weakness, recently testing a demand zone near $2,300, on-chain engagement reached multiple all-time highs during January 2026.
The report frames the current environment as one where market valuation has deteriorated even as network usage and participation continue to accelerate.
On-Chain Activity Reaches New Records
Despite bearish price action, Ethereum’s utility metrics showed strong month-over-month growth:
- New addresses climbed to an all-time high of 427,000 daily, far exceeding the 162,000 peak recorded during the 2020 “DeFi Summer.”
- Daily active addresses (7-day moving average) reached a record 1.2 million, representing a 27.5% MoM increase.
- Network transactions increased by 36.0% MoM, signaling broad-based growth in on-chain activity.
Goldman Sachs characterized these figures as evidence of sustained engagement across the Ethereum network, even as market sentiment weakened.
Market Cap Falls Below Realized Value
A key technical observation in the report is that Ethereum’s current market capitalization has dropped below its realized market capitalization. According to Goldman Sachs, this condition implies that the average ETH holder is currently at a net loss, based on the price at which tokens last moved on-chain.
Analysts identified the $2,300–$2,500 range as a critical demand zone. Failure to hold this area could expose Ethereum to further downside, while a recovery above $2,800 would be required to signal a return to bullish momentum.
Institutional Factors to Watch in 2026
Looking ahead, the report and related commentary point to several institutional dynamics that could shape Ethereum’s trajectory:
- ETF inflows: Timothy Misir of BRN emphasized that consistent ETF fund flows remain the most important signal. Without stable institutional participation, any near-term rebound may struggle to sustain.
- Staking evolution: The emergence of “fully staked” exchange-traded products in Europe suggests a structural shift, potentially positioning staking as a core institutional demand driver rather than a secondary feature.
- Macro backdrop: Goldman Sachs remains broadly constructive on global equities in 2026, projecting an 11% return, which could later provide a supportive environment for risk-on assets such as Ethereum.
Outlook
Goldman Sachs’ analysis underscores a growing disconnect between Ethereum’s market price and its network fundamentals. While price action has weakened into a key demand zone, on-chain data reflects expanding usage and engagement at record levels.
Whether this divergence resolves through price recovery or further downside will likely depend on institutional flows, staking adoption, and broader macro conditions as 2026 unfolds.
