L1s are still navigating that fine line between conviction and speculation. And Ethereum [ETH] really illustrates this dynamic.
On the developer front, it’s far ahead of the pack, with deployed contracts reaching a record 9.1 million in Q4 2025, even as the price corrected 45%, marking its worst quarterly performance since the 2018 bear market.
Still, despite these headwinds, the sheer level of developer activity signaled a strong, resilient foundation for ETH, setting the stage for Ethereum to extend a long-term, fundamentals-driven rally in 2026.
Notably, it’s showing up on-chain.
NFT volume puts Ethereum in the lead, with $12.6 million flowing through the network. DApp activity? Up a staggering 1,135% to $180 billion weekly. Basically, all that developer energy is directly fueling real network use.
But here’s the kicker: The price isn’t fully reflecting it. Even with this kind of on-chain activity, Ethereum still trails Bitcoin [BTC] by nearly 1.5x. That’s a pretty big gap compared to what we’ve seen in past rallies.
Naturally, the question is, can ETH repeat its Q2 gains against BTC?
Ethereum’s strength on-chain drives speculation off-chain
ETH’s short-term outlook is weighing on its long-term growth potential.
Even with strong developer activity, ETH has dipped below $2k as Vitalik Buterin keeps selling. Meanwhile, on-chain metrics point to a heavily leverage-driven sentiment, showing little sign of spot accumulation.
At the same time, the ETH/BTC ratio continues to chop in a tight range, but it still fell 0.28% on the week. This reinforces Ethereum’s bearish setup and signals that meaningful rotational flows from BTC to ETH are missing.
All things considered, speculation is clearly outweighing conviction.
From a sentiment perspective, that alone puts a damper on Ethereum’s long-term potential, with the market still too focused on short-term moves. As a result, repeating Q2 2025 gains against BTC looks unlikely.
Instead, if this trend holds, ETH is set to extend losses to BTC in Q2.
Final Summary
- Ethereum’s developer activity and on-chain growth remain record-high, but the price lags, and ETH still trails BTC by 1.5x.
- Leverage-driven sentiment and lack of BTC flows suggest ETH’s short-term weakness could continue, making a repeat of Q2 2025 gains unlikely.
