Ethereum saw its strongest on-chain activity ever in late December 2025, with transaction volumes hitting a new all-time high—even though ETH’s price continues to hover around the $3,000 mark, well below the highs of previous market cycles. This surge in network usage has been driven largely by growing Layer-2 settlement activity, a rebound in DeFi participation, and steady stablecoin transfers. At the same time, improvements in network efficiency have helped keep transaction fees relatively stable compared to earlier cycles.
On-chain data points to improving fundamentals beneath the surface. Large ETH holders are still accumulating, while exchange reserves have dropped sharply over the past year, suggesting less ETH is readily available for sale. Increased transaction activity also means more ETH is being burned through the EIP-1559 mechanism, which could slowly tighten supply over the long term.
However, short-term market forces are still weighing on price. Recent spikes in ETH inflows to major exchanges—often a sign of potential selling or defensive positioning—help explain why price movement has remained limited. As a result, Ethereum is currently stuck in a divergence: record-breaking network demand on one side and muted market sentiment on the other, with future price direction likely hinging on broader liquidity conditions in the weeks ahead.