Ethereum's Reemerging Bull Case: Is ETH Poised for a $4,000 Run in 2026?

Ethereum's journey in Q4 2025 has been a study in contrasts: while its price declined nearly 27.6% during the quarter, on-chain demand metrics and open interest trends suggest a reemerging bull case. With institutional adoption, Layer 2 innovation, and stablecoin dominance reshaping the network's fundamentals, the question now is whether Ethereum can translate this strength into a $4,000 price target by 2026.

On-Chain Demand: A Network in Expansion Mode

Ethereum's on-chain activity in Q4 2025 shattered previous records, signaling robust demand. According to a report by Yellow, the network deployed 8.7 million smart contracts in the quarter, surpassing the 2021 high of 6 million. This surge was fueled by the approval of ETH ETFs, which catalyzed DeFi adoption, and the proliferation of Layer 2 (L2) solutions like Base and Arbitrum, which reduced gas fees to an average of $0.17.

Stablecoin volume further underscored Ethereum's growing role as a backbone for global finance. Data from CryptoRank revealed that Ethereum processed $8 trillion in stablecoin transfers in Q4 2025, a 100% increase from just two quarters prior. This growth reflects both retail and institutional demand for Ethereum-based stablecoins as a bridge between traditional and crypto markets.

Address growth also tells a compelling story. Token Terminal data showed Ethereum created 327,000 new wallets daily in early 2025, driven by the Pusaka upgrade. Meanwhile, active monthly addresses hit 10.4 million, and daily transaction volumes reached 2.23 million. These metrics suggest Ethereum is not just retaining its user base but expanding it, even amid price volatility.

Open Interest Trends: Rebuilding Confidence

Despite Ethereum's price slump, open interest in Ether futures has rebounded to pre-Q4 2025 drawdown levels, indicating traders are reaccumulating the asset. This divergence between price and open interest suggests a shift in positioning, with spot-led demand outpacing speculative short-term trading.

Institutional activity has further reinforced this narrative. Companies like BitMine have staked large ETH reserves, signaling long-term confidence in the network's value proposition. Meanwhile, open interest data from MEXC highlights a critical juncture: Ethereum is currently testing a $3,200–$3,400 resistance band. A breakout above $3,400 could trigger a rally toward $3,800 and potentially $4,000, though volume confirmation will be key.

Technical Levels and Seasonality: A Path to $4,000?

From a technical perspective, Ethereum is forming a symmetrical triangle pattern, with the $3,100 level acting as a pivotal support zone. Analysts at FXLeaders argue that a close above the resistance trendline could validate a bullish breakout, while a rejection might lead to a retest of $3,000 and further downside risk to $2,623.

Historical seasonality also offers a cautiously optimistic outlook. Q4 2025's losses align with past patterns where strong gains followed weak quarters, suggesting a potential rebound in Q1–Q2 2026. If Ethereum can clear $3,400 with strong volume, the path to $4,000 becomes more plausible, particularly if macroeconomic conditions improve and ETF inflows accelerate.

Conclusion: A Bull Case Built on Fundamentals

While Ethereum's price has lagged in Q4 2025, the underlying fundamentals are undeniably strong. Record smart contract deployments, explosive stablecoin growth, and expanding address activity demonstrate a network in ascension. Meanwhile, open interest trends and technical patterns suggest that the market is poised for a directional move.

For investors, the key variables will be volume during a potential breakout above $3,400 and the pace of institutional adoption. If Ethereum can maintain its on-chain momentum and attract sustained capital inflows, the $4,000 target may not be as distant as it seems.