Ethereum's Q4 crash triggers a historic rebound. Will the bullish trend continue into the first half of 2026?

After experiencing a 28.28% quarterly decline in Q4 2025, Ethereum has shown clear signs of rebound at the beginning of 2026. According to historical cycle analysis based on Coinglass data by crypto analyst Crypto Rover, this pattern of “Q4 decline followed by Q1-Q2 rebound” has occurred multiple times in Ethereum’s history. Currently, ETH price has rebounded from the year’s low, with a total increase of 6.57% in Q1, and the fundamentals are improving in tandem. However, whether this rebound can continue still depends on several key factors.

Historical Pattern: Q4 Declines Often Precede Rebounds

Ethereum’s Q4 declines are not uncommon. Historical data shows similar Q4 corrections in 2016, 2018, 2019, and 2022. More importantly, in all these cycles, the subsequent first quarter recorded positive returns, with second-quarter gains further amplifying.

Consistency in Historical Data

This data reveals a clear seasonal characteristic: year-end sell-offs, portfolio rebalancing, and tax strategies may suppress the market in the short term but often build momentum for a rebound in the new year. Risk appetite tends to re-emerge early in the year, coupled with the easing of year-end selling pressure, creating a favorable environment for ETH price recovery.

Current Rebound Signals Are Emerging

The performance in Q1 2026 is echoing this historical pattern.

Price and Liquidity Improvements

As of now, ETH is priced at $3,246.94, with a 6.57% increase in Q1. The past 7 days saw a 9.25% rise, indicating that market buying interest is gradually returning. On-chain data also confirms this trend—over the past 24 hours, CEXs recorded a net outflow of 4,056.15 ETH, with Coinbase Pro outflows of 5,827.95 ETH and Binance outflows of 2,716.56 ETH. This suggests a recovery in investor withdrawal sentiment, often a sign of optimism about the market’s outlook.

Fundamentals Are Improving in Tandem

Besides price rebound, Ethereum’s fundamental indicators are also trending positively:

• Accelerated user growth: Since the December 2025 Fusaka upgrade, new ETH addresses have increased by approximately 110%, with an average of 292,000 new addresses daily.
• On-chain activity rising: Stablecoin transfer volume hit a quarterly record, surpassing $800 billion.
• Institutional capital returning: Grayscale ETH staking ETF distributed staking rewards to shareholders, marking the first time a U.S. spot crypto ETF has paid staking yields to investors.
• Technological progress: Vitalik Buterin stated that Ethereum is close to solving the “blockchain trilemma,” and in 2026, will begin small-scale use of ZK-EVM.

These indicators collectively suggest that Ethereum is not only rebounding in price but also experiencing synchronized improvements across user base, activity levels, and institutional involvement.

Bullish Outlook Supported by Logical Factors

Combining historical patterns with current realities, the probability of ETH maintaining a bullish trend in the first half of 2026 is increasing.

Supporting Factors

Based on current cycle data, the main market expectations include: average Q1-Q2 gains of 139% and 158% respectively; accelerated institutional reallocation at the start of the year; improved liquidity environment; and positive fundamental data. These factors together provide multiple supports for ETH price appreciation.

Risks to Watch

However, it’s important to note that this is not a certainty. Several factors could still disrupt the trend:

• Regulatory policy changes may introduce uncertainties
• Macroeconomic fluctuations could impact sentiment
• External shocks could cause sudden disruptions
• Short-term technical confirmation requires volume support
• Medium to long-term sustainability depends on ongoing network fundamentals

Summary

After a 28.28% decline in Q4 2025, Ethereum is repeating a common historical cycle of “Q4 decline followed by Q1-Q2 rebound.” Current signs include a 6.57% price increase, improved liquidity, positive fundamentals, and institutional capital inflows. Historically, such cycles have seen average Q1 gains of 139% and Q2 gains of 158%, providing statistical support for a medium-term bullish outlook.

Nevertheless, the recurrence of this pattern is not guaranteed. Investors should monitor regulatory developments, macroeconomic conditions, and on-chain fundamentals closely to adjust strategies accordingly. In the short term, whether trading volume expands in tandem is a key observation; in the medium to long term, the sustainability of network fundamentals and capital flows will be more critical.