Ethereum On-Chain Strength Hints at Potential L1 Season in 2026

• Altcoin Season Index climbs higher, indicating rotation from Bitcoin.

• ETH/BTC ratio remained range-bound throughout 2025, limiting altcoin gains.

• Ethereum processed 2.23 million transactions daily, a 10-year high per Etherscan data.

Altcoin season 2026 gains traction with Layer 1 strength: Ethereum’s record 2.23M txns, low fees signal utility shift after 2025 divergence. Explore L1 potential now.

What is the Altcoin Season Index signaling for 2026?

Altcoin season 2026 appears underway as the Altcoin Season Index ticks upward, reflecting investor rotation back into alternatives after Bitcoin consolidation. Historically, altcoins surge during such phases, but 2025 diverged with muted performance. Now, robust on-chain metrics across Layer 1 networks suggest a fundamentals-led rally is emerging.

2026 has started with renewed momentum in the altcoin market.

The Altcoin Season Index is ticking higher, signaling a rotation back into alts. That said, when looking back at the 2025 cycle, a clear divergence stood out, with investors deviating from the usual rotation playbook.

Historically, altcoins tended to outperform during periods of Bitcoin [BTC] consolidation. This cycle, that rotation never fully played out.

The ETH/BTC ratio stayed range-bound, capping Ethereum’s [ETH] speculative upside. 

Source: TradingView (ETH/BTC)

Notably, that dynamic showed up clearly in 2025 returns. 

From a technical lens, ETH closed the year down 10.97%, entering the new year below the $3k level. Bitcoin, by contrast, held up better, finishing 2025 down 6.24%, suggesting capital largely stayed parked in BTC.

Still, despite the weakness, Ethereum continued to post strength across key on-chain metrics.

In fact, this wasn’t isolated to Ethereum. Similar upticks were seen across other L1s, highlighting a clear divergence this cycle.

Why did Layer 1 networks like Ethereum show record activity in late 2025?

Ethereum recently processed a record 2.23 million transactions in a single day, the highest in its 10-year history, according to Etherscan data. Fees remained under $0.01 with stable finality and no congestion. This trend extends to other Layer 1s, driven by real-world asset tokenization, stablecoin volumes, and chain upgrades emphasizing utility over speculation.

Source: Etherscan

As detailed in analyses from market observers like COINOTAG, this on-chain surge contrasts with price underperformance, underscoring a market maturing toward sustainable adoption. Layer 1 networks processed billions in stablecoin transfers and real-world assets in 2025, per blockchain analytics, laying groundwork for broader altcoin participation in 2026.

What’s more, other Layer 1s are showing the same trend. In this context, COINOTAG’s thesis starts to gain weight. While 2025 didn’t deliver an “altcoin season,” the market still saw a clear shift, with growing ETF flows toward these altcoins showing the trend is more than a one-off. Now, as the market heads into 2026, the foundation stands strong. High-cap altcoins are showing solid on-chain usage, while speculative activity is beginning to fade, creating a divergence that could spark a full-blown “L1 season,” with Layer 1 networks finally taking the spotlight.

Frequently Asked Questions

What caused the altcoin underperformance against Bitcoin in 2025?

The ETH/BTC pair stayed range-bound, preventing typical rotation gains, as reported on TradingView charts. Ethereum ended 2025 down 10.97% below $3,000, while Bitcoin dropped 6.24%. Investors favored Bitcoin stability amid consolidation, diverging from historical patterns.

Is 2026 poised for a Layer 1 altcoin season?

Yes, early indicators like the rising Altcoin Season Index and Ethereum’s record 2.23 million daily transactions with sub-$0.01 fees point to strong Layer 1 utility. Other L1s mirror this growth in stablecoins and RWAs, shifting focus from hype to network activity, ideal for voice search clarity.

Key Takeaways

• Fundamentals Outpace Price: Altcoins lagged in 2025, but Layer 1 metrics like Ethereum’s transaction records show robust usage.
• Utility Drives 2026: Record volumes in RWAs and stablecoins highlight shift from speculation to real activity.
• Watch the Index: Rising Altcoin Season Index signals potential L1-led rally; monitor on-chain data for confirmation.

Conclusion

In summary, altcoin season 2026 builds on Layer 1 divergence from 2025, where Ethereum and peers posted record on-chain strength despite price weakness. With the Altcoin Season Index climbing and utility metrics like 2.23 million transactions solidifying, networks are positioned for sustained growth—stay tuned for further rotations into high-cap alts.