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Ethereum Is Inflationary Again, and 59% of Traders Think It Will Lose Number Two Spot in 2026

coinpedia.org 2 h

Ethereum

Ethereum is closing March around $2000, still under pressure after a rough quarter.

Data from CryptoRank shows $ETH ended Q1 2026 down 32.8%, despite a small 1.3% bounce in March.

The drop came from a mix of market forces hitting at once:

The AI Proxy Trap (February Meltdown)

First, Ethereum started behaving like a tech stock. Its correlation with the Nasdaq jumped to 0.82 during February, meaning when tech corrected, $ETH fell even harder. Investors treated it as a high-risk “AI proxy” rather than a core crypto asset.

The $3,000 → $1,473 Liquidation Cascade

Second, a massive liquidation event made things worse. Once $ETH lost the $3,000 level, over $5.4 billion in leveraged positions were wiped out. This triggered forced selling, pushing the price down rapidly to a low near $1,473. With liquidity already thin, the fall became sharper than expected.

The “Inflationary” Identity Crisis

Ethereum’s own upgrades also played a role. Improvements like EIP-4844 reduced fees and made the network more efficient, but they also cut the burn rate. For 42 days in Q1, $ETH supply actually increased.

This weakened the “ultrasound money” perspective that many investors relied on, reducing confidence at higher price levels.

Geo-Politics in the Mix

Global conditions added another layer. Rising oil prices and inflation fears pushed markets into a defensive mode. Capital moved into traditional assets like gold, while crypto saw reduced inflows.

For the first time in years, Ethereum’s “digital asset” narrative failed to compete with real-world commodities.

How Low Can $ETH Go and What About April?

As per Coindcx prediction, short-term projections hint the $ETH Price could drop toward $1,900 if support breaks. On the upside, reclaiming $2,120 could open a move toward $2,200. On the top, Polymarket, traders now see a more than 59% chance that Ethereum could lose its No. 2 spot in 2026, up sharply from just 17% at the start of the year.

For April, expectations remain low. $ETH is likely to trade between $1,900 and $2,250. A break above $2,250 would signal strength, while failure to hold $1,900 could extend the downside.