Ethereum is gaining significant momentum in early 2026, powered by a substantial return of institutional investment. After a period of caution, millions are flowing back into U.S. spot ETFs, a move underscored by record-setting accumulation from long-term holders directly on the blockchain. Despite these strengthening fundamentals, the cryptocurrency now faces a critical technical test on its price charts.
Whales Accumulate Amid Lower Prices
Beyond the activity in exchange-traded products, on-chain data reveals a parallel trend. Analysis of wallet distribution shows that large-scale investors—commonly called whales—aggressively increased their holdings during December’s price declines. This accumulation phase suggests seasoned market participants viewed the lower price levels as an attractive entry point, potentially establishing a foundation for the current recovery. This bullish behavior is complemented by record-high activity on Ethereum’s Layer-2 scaling networks, highlighting robust fundamental use of the ecosystem.
A Pivotal Chart Test Looms
The technical picture presents a challenge, even alongside positive fundamental developments. Trading near $3,000, Ethereum’s price remains slightly below its 50-day moving average, which is currently acting as immediate resistance. Market observers note that a sustained break above this level, and further beyond the $3,120 zone, is necessary to confirm a genuine trend reversal. The “Fear & Greed Index” continues to signal “Extreme Fear” with a reading of 25, indicating retail investor sentiment remains hesitant and that the present upward movement is primarily institutionally driven.
Should investors sell immediately? Or is it worth buying Ethereum?
ETF Inflows Provide Key Momentum
The primary catalyst for renewed interest is a sharp reversal in capital flows. On the first trading day of the year, U.S. spot Ethereum ETFs recorded net inflows of $174.5 million. This marks the strongest single-day influx in 15 trading sessions. A particularly significant shift occurred at the Grayscale Ethereum Trust, which saw approximately $54 million in inflows, signaling a notable change in sentiment. This resurgence of institutional capital builds on a strong previous year where billions already flowed into these products.
The immediate future hinges on whether ETF demand remains stable enough to push the price above key technical hurdles. Fundamentally, the market is already looking ahead to the planned “Fusaka” upgrade slated for 2026, which aims to further improve scalability. In the near term, however, maintaining support around the $2,950 level is crucial to preserving the positive momentum.
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