Ethereum Maintains Strong Onchain Dominance Despite Price Drop, Analysts See Long-Term Potential

Despite a significant price decline this year, Ethereum’s network activity, staking growth, and DeFi presence highlight its continued appeal as a long-term investment.

Editorial Team · May 23, 2026 · 2 min read · Source: cointelegraph.com

Ethereum remains the leading blockchain platform for decentralized finance (DeFi) and tokenized assets, reinforcing its position as a key player in the crypto ecosystem even after losing substantial value this year. The network supports around $43 billion in DeFi liquidity and hosts over $165 billion in stablecoins, alongside controlling more than half of the tokenized assets tracked across all public blockchains.

Market data also reveals Ethereum’s dominance in tokenized exchange-traded funds (ETFs), holding nearly 77% of over $400 million in market capitalization within this segment. These figures underscore the network’s role as a primary settlement layer for emerging financial narratives on the blockchain.

Staking activity on Ethereum has shown resilience, with nearly 39.1 million ETH locked by over 896,000 validators—equivalent to about 32% of the total ETH supply. The staking entry queue remains high, with more than 3.49 million ETH awaiting activation, indicating sustained interest despite the 28% price drop. Meanwhile, withdrawal demand stays minimal, suggesting holders prefer to stay engaged in the network’s consensus mechanism.

Additional onchain metrics from CryptoQuant indicate a resurgence in accumulation behavior among long-term holders. A single-day inflow to accumulation wallets reached its highest level since early January, signalling confidence in ongoing investment despite market volatility.

Technical analysis suggests Ethereum is still trading within a broad multi-year accumulation range between $1,000 and $5,000. Some analysts view the $1,000 to $1,300 zone as a potential bottom that could serve as a final capitulation before a new bullish phase. Long-term price targets extend into the $7,700 to $14,000 range for the 2027–2029 period, reflecting optimistic future growth scenarios.

Another key indicator is Ethereum’s recent price movement relative to its two-year simple moving average (SMA). Dropping below the baseline SMA x1 band indicates ETH is trading near fair value by historical standards, which some traders regard as a solid entry point during normal market phases.