Crypto: Tom Lee Tips Lack Of Leverage And Gold ‘vortex’ For Ether's 21% Slump

Ether has fallen despite strong fundamentals as leverage remained absent and precious metals diverted risk appetite, according to Fundstrat's research head.

Fundstrat head of research Tom Lee argues Ether's recent slump should be seen as “attractive” as its fundamentals remain strong, and that it has only fallen due to a lack of leverage and a flight to precious metals.

The first quarter of 2026 is shaping up to be Ether’s (ETH) third-worst Q1 in history, with the asset down 21% so far this year, according to CoinGlass.

However, Lee said the price drop has come at a time when network on-chain activity and fundamentals have continued to grow.

Ethereum daily transactions hit an all-time high of 2.8 million on Jan. 15, and active addresses in 2026 soared to a peak of 1 million per day, he said.

During the crypto winters of 2018 and 2022, Ethereum transaction activity and active wallets declined, “which is counter to what we have seen in the past 12 months,” said Lee.

Lee said two factors are keeping Ether prices suppressed. Leverage has not returned to crypto since the Oct. 10 crash, while the surge in precious metal prices has “acted as a ‘vortex’ sucking away risk appetite from crypto.”

Lee’s Ethereum treasury firm appears to be betting on a recovery. In the past week, BitMine acquired a further 41,788 ETH.

“BitMine has been steadily buying Ethereum, as we view this pullback as attractive, given the strengthening fundamentals,” he said.

Related: Crypto selloff is likely due to US liquidity drought: Analyst

Source: CoinTelegraph