Ethereum is nearing a milestone that most investors won’t welcome: its longest consecutive monthly losses since the crypto winter of 2018.
Since September 2025, ETH has recorded six consecutive months of decline, with the price dropping approximately 60% from its all-time high of $4,953 in August 2025 to below $2,000.
Losing streaks of this length are unusual for networks that are sending record transaction activity simultaneously, and the contrast makes the current phase noteworthy.
As a result, the immediate problem is not just the decline of ETH.
The move suggests the market is reassessing the value of Ethereum amid strong network usage, but the mechanisms that once supported a simple bullish thesis for ETH are becoming harder to model.
The current drawdown therefore differs from the 2018 crash, when the broader crypto market was emerging from a new coin issuance boom and much of the sector was still trying to permanently prove product-market fit.
Ethereum in 2026 will be a more mature network. Deeper institutional relevance, larger scale on-chain economic activity, and more widespread use across tokenization, stablecoins, and layer 2 networks.
However, the tokens associated with that system still struggle to maintain their value.
Bitcoin acts like an index and ETH acts like a high beta trade
In a broad crypto decline, Bitcoin behaves more and more like a market benchmark, while ETH behaves more like a high-beta representation of the sector.
That becomes important if liquidity weakens and sentiment turns defensive. ETH has less market depth than Bitcoin, its positioning is often more leveraged, and marginal buyers are more sensitive to changes in macro risk appetite.
Once market risks are removed, that structure could turn a broad decline in cryptocurrencies into a surge in Ethereum, especially if derivatives rather than spot markets are setting the tone.
This is why ETH’s leverage footprint remains central to its story.
According to data from CoinGlass, ETH futures open interest has declined by 65% from a peak of around $70 billion in August 2025 to around $24 billion at the time of writing. This sharp decline explains the lack of risk in the market.
Still, this also shows that ETH prices are forming in a market where forced position changes can be dominant. As traders become risk averse, liquidations, hedging, and contract roll-downs can overwhelm discretionary purchases.
Notably, the options market reflects the same tension.
Deribit analysis shows sharp spikes in short-term implied volatility and significant negative skew, typical signs that the market is paying more for downside protection than upside exposure.
The fact of the matter is that traders don’t just expect movement. They pay a premium to protect themselves from falling prices.
This helps explain the range of outcomes implied by the market. Recent 7-day at-the-money implied volatility has been near the low 70%, suggesting a one standard deviation band of roughly plus or minus $200 movement per week, or around $1,950 in the spot.
This expands to about $430 plus or minus a month and about $740 plus or minus a quarter.
These are not target prices. These are snapshots of how uncertain the next quarter remains and how wide the market believes the possible paths have become.
Flow diagram is not helping ETH bulls
Derivatives markets explain how ETH prices move, but they don’t fully explain why dips don’t find more durable buyers.
This puts the focus on capital formation, the slow-moving support that determines whether a decline attracts new capital or simply causes a short-covering bounce.
In that regard, ETH’s two signals remain weak.
First, let’s talk about ETFs.
While daily numbers fluctuate, the broad multi-month trend for U.S.-listed Ethereum ETFs has been net redemptions, with nine funds posting $2.6 billion in outflows over the past four months.
This is more important as a statement about the sustainability of the system than as a headline about near-term selling pressure.
If ETF flows are not structurally positive, Rally will need to raise money elsewhere. In practice, it often means relying even more heavily on the same derivative complexes, which can increase vulnerability.
At the same time, institutional acquisitions of digital asset treasury companies have slowed significantly, with Bitmine being the only major acquisition target in recent months.
In fact, another ETH-focused treasury firm, ETHZilla, has divested its ETH holdings and pivoted to tokenized real-world assets.
The second is stablecoin supply. This is one of the clearest real-time proxies of crypto-native purchasing power.
Over the past few months, major stablecoins have experienced a significant slowdown, making a broader market recovery unlikely.
For context, Tether’s USDT market cap has declined for the second consecutive month, indicating that the pool of new liquidity is not expanding in the space. Notably, this has not happened since Terra’s USDT algorithmic stablecoin collapsed in 2022.
This is important for Ethereum because its strongest bullish phases tend to coincide with expansions in on-chain purchasing power.
When a stablecoin has a flat base, price movements can be reduced to rotational and leverage-driven movements rather than sustained spot accumulation.
In such an environment, rebound may occur, but they will struggle to stand on their own.
Ethereum is expanding, but that complicates the value story
Also, the current downward trend is different from 2018. This is because Ethereum’s network is becoming more congested and its scaling roadmap is coming to fruition.
Ethereum’s seven-day moving average of daily trades reached a new high of around 2.9 million in early February, according to data from CryptoQuant.
Driving forces for this milestone include the continued growth of on-chain use cases, such as the tokenization of real-world assets, and the shift to cheaper execution, which has reduced transaction costs for users. In general, lower fees and higher throughput favor adoption.
However, the expansion has complicated the valuation frameworks that many investors relied on in the post-merger era.
The “super healthy money” narrative, reinforced by EIP-1559 and the move towards proof of stake, focused on fee burn as a potential channel to shrink supply.
This mechanism will still work during periods of high fee pressure, where demand for block space increases, fees jump, burn increases, and ETH may turn into net deflation.
However, the important point is that this path is not automatic, but conditional.
When demand is normal, or when activity moves to cheaper execution environments, write pressure decreases. The post-Denkun environment presents trade-offs. BLOB data makes rollups cheaper to operate, lowers Layer 2 charges, and allows for increased capacity.
For ETH holders, this also means that the base layer may not be able to extract the same fee income under normal circumstances.
Data from Ultrasound.money shows periods in which ETH issuance exceeds burn.
This undermines the always simplistic version of the deflationary narrative and forces a more nuanced discussion about how Ethereum will capture value in a future dominated by rollups.
While the network has the potential to grow as a payments layer, it will be difficult to model the direct monetary case for tokens using analogies that investors understand, such as buybacks and dividends.
A six-month losing streak is useful in that context, as it suggests that the market is reevaluating the relationship between ecosystem growth and token value at a time when macro conditions provide limited support.
What could stop the losing streak?
The next stage for Ethereum will likely fall into one of three broad paths.
The first is the outcome from surrender to reset. If March 2026 ends with a decline, the streak will rival the record set in 2018, and the psychological burden will increase.
In this scenario, ETF redemptions continue, stablecoin supply remains flat, and option skew remains significantly negative, indicating that hedging demand remains dominant.
The price then tends to test the lower end of the implied volatility cone, not because Ethereum is broken, but because the market wants a big discount before taking risks again.
The second is chopping and base building over a long period of time. This is a less dramatic but probably more realistic outcome. Leverage continues to disappear, volatility remains elevated but is beginning to stabilize, and ETH is widely traded while macro data remains mixed.
Ethereum could continue to show healthier application revenue and stronger Layer 2 activity in that world. The difference is that the price will not pay off right away as we are waiting for liquidity conditions to improve.
The third is a shift in liquidity. A more sustained rebound for ETH will likely require a combination of macro tailwinds, easing risk-off pressures, stabilization of ETF flows, and new growth in stablecoin purchasing power.
If that happens, the market could start looking at Ethereum’s scaling story differently. Rather than focusing on fee compression, investors may be able to focus on Ethereum as a payment layer with a larger economic surface area.
In that framework, the evaluation discussion moves away from Byrne alone and toward integrality.
The main takeaway is that Ethereum is not just 2018 all over again. Markets are testing new narratives under stress.
Ethereum has become easier to use, but during quiet periods, monetization through fees is not as evident as many investors once assumed.
This tension, along with macro risk appetite and the quality of capital flowing through ETFs, stablecoins, and derivatives, will determine whether this streak ends in a painful footnote or begins a long period of repricing.