Fundstrat’s head of research, Tom Lee, argues that Ether’s recent crash should be seen as “attractive” because its fundamentals remain powerful and it has only fallen due to a lack of leverage and a flight to precious metals.
The first quarter of 2026 is shaping up to be the third worst first quarter for Ether (ETH) on record, with asset values down 21% this year. According to to CoinGlass.
However, Lee he said the price drop came at a time when on-chain network activity and its fundamentals continued to grow.
Ethereum’s daily transactions reached an all-time high of 2.8 million on January 15, and lively addresses in 2026 rose to a peak of 1 million per day, he said.
During the crypto winters of 2018 and 2022, Ethereum transaction activity and lively wallets declined, “which is contrary to what we have seen over the last 12 months,” Lee said.
“Thus, non-fundamental factors are likely more explanatory factors for the ETH price weakness.”
Lee said two factors are keeping ether prices low. Leverage has not returned to cryptocurrencies since the October 10 crash, while the rise in precious metal prices “acted as a ‘vortex’ sucking risk appetite from cryptocurrencies.”
BitMine buys dip after ETH drops 25% in one week
Treasury firm Lee Ethereum appears to be betting on a recovery. Last week, BitMine acquired another 41,788 ETH.
“BitMine continues to buy Ethereum as we see this pullback as attractive given the strengthening fundamentals,” he said.
“In our opinion, the ETH price does not reflect ETH’s high utility and its role as the future of finance.”
Related: Crypto Sell-off Is Likely Due to US Liquidity Drought: Analyst
BitMine currently holds 4.28 million ETH, or 3.55% of the total supply, and is 70% ready to reach its 5% target. He staked approximately 2.87 million ETH.
However, the digital asset vault approached $7 billion in unrealized losses as ether prices fell.
Most of the price decline occurred just last week, with ETH falling more than 25% on Monday from around $3,000 to a bear market low of $2,200 on Monday, before recovering slightly.
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