Ethereum's Metrics Signal Potential Rally Despite Market Weakness
By John Nada·Jan 28, 2026·3 min read
Ethereum shows signs of a potential rally despite recent price corrections and market volatility, driven by strong transaction metrics and DEX activity.
Ethereum is facing volatility, yet key metrics hint at a possible rally. The network recorded 16.4 million weekly transactions, maintaining low fees under $0.20 amid high demand. Decentralized exchange (DEX) volume across the Ethereum ecosystem reached $26.8 billion, indicating renewed investor interest. Despite a 15.9% price correction over the week, which led to $910 million in liquidations for bullish leveraged positions, signs of a rally back to $3,300 are emerging.
Onchain and derivatives metrics suggest a resilient demand for Ether (ETH). Base layer fees are crucial for gauging the health of a native token, closely followed by transaction volume and active addresses. Ethereum's strategy of prioritizing scalability via rollups appears to be paying off, as evidenced by increased activity on Base, Polygon, Arbitrum, and Optimism.
Network fees on Ethereum surged by 19% last week, while competitors like Tron and Solana saw declines. Notably, the total transactions on Ethereum layer-2s soared to 128 million, outpacing BNB Chain and Tron, which showcases Ethereum's ability to scale effectively without losing core utility.
Weekly DEX volumes on Ethereum climbed to $13 billion from $8.15 billion just four weeks prior. Even though Solana leads with $30 billion in weekly volume, Ethereum's ecosystem remains robust. The Fusaka upgrade in December significantly enhanced network data capacity and improved user experience, contributing to this uptick.
Ethereum's dominance in total value locked (TVL) demonstrates a strong preference for decentralization among investors, even as BNB Chain and Solana struggle for market share. Following a brief period of hedging against losses, professional traders have returned to a neutral stance concerning call and put options. Remarkably, the peak volume in put options occurred after ETH fell below $2,800, suggesting a recalibration of trader sentiment.
The ETH options put-to-call volume ratio at Deribit steadied between Monday and Tuesday after five days favoring puts. This shift indicates a recovery in trader confidence, notably as fears regarding a potential US government funding shutdown's impact on the market appear limited.
Amidst Ether's price struggles, the S&P 500 is trading close to its all-time high, while five-year US Treasury yields have stabilized near 3.85%. Investors remain cautious about inflation and recession risks, with the probability of the Federal Reserve reducing rates to 3.25% or lower by July declining to 28%.
Ultimately, Ethereum's trajectory toward $3,200 will likely depend on sustained DEX activity, rising network fees, and the resolution of uncertainties in the options markets. Ethereum's ability to bounce back from this correction hinges on these critical factors, reinforcing the importance of monitoring market dynamics closely.