Investors in Ethereum, the world’s second-largest cryptocurrency, are facing a tense period. A significant price decline has been compounded by substantial selling activity traced to wallets associated with co-founder Vitalik Buterin, raising fresh concerns over the asset’s near-term stability during an already fragile market phase.
Market Sentiment Sours as Liquidations Mount
The broader context is one of pronounced selling pressure. Ethereum’s price recently fell below the psychologically significant $1,900 level, currently trading around $1,865. This drop triggered a cascade of forced liquidations, with leveraged long positions worth $112 million being unwound within a 24-hour span. Since the start of the year, ETH has declined by nearly 38%, and prevailing market sentiment, as measured by the Fear & Greed Index, points to extreme fear, leaving little momentum for a bullish reversal.
Scrutiny on Founder-Linked Transactions
Amid this backdrop, on-chain data has revealed considerable sell-offs from Buterin-affiliated addresses. These wallets have disposed of Ether worth more than $15.5 million in February alone. The transactions included several bundles each valued at over $3 million within the last 48 hours, alongside a separate transfer of approximately 428 ETH recorded on February 22.
A notable technical aspect of these sales is the use of the CoW Protocol. This decentralized exchange aggregator is frequently employed by large-scale investors to mitigate price slippage and lessen the direct market impact of substantial sell orders on spot prices. Nevertheless, such conspicuous movements by a foundational figure within the Ethereum ecosystem inevitably attract attention and weigh on investor psychology.
Should investors sell immediately? Or is it worth buying Ethereum?
A Tale of Two Staking Trends
The current market dynamics present a complex picture, particularly within Ethereum’s staking ecosystem. On one hand, demand for new staking deposits has plunged by almost 50% since its peak in January. This suggests that less Ether is being newly locked up by validators, which could incrementally increase the liquid supply available on the open market.
Conversely, long-term holders continue to demonstrate conviction. The total proportion of staked Ether reached a new record high in mid-February, exceeding 30.5%. This creates a clear divergence between the short-term selling pressure and sustained, long-term confidence in the network’s underlying protocol.
With prominent actors reducing their holdings and derivative markets under strain, downward pressure continues to dominate the narrative for Ethereum. The convergence of technical liquidations and high-profile selling is testing the resilience of investors during a challenging phase for digital assets.
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