The Ethereum network is navigating one of its most challenging periods, with the cryptocurrency currently on track for its third-worst first-quarter performance in history. Compounding the fragile market sentiment, blockchain co-founder Vitalik Buterin has resumed substantial sales of his ETH holdings, raising questions about underlying confidence levels during a pronounced technical struggle.
Market Sentiment Weighed by Founder Activity
On-chain data reveals that after a two-week hiatus, Vitalik Buterin has once again begun divesting portions of his Ethereum. Transactions recorded over a recent weekend alone show the sale of approximately 1,694 ETH. Since the end of January, Buterin’s total disposals have surpassed $15.5 million in value. While these transactions utilize the CoW Protocol—a mechanism designed to minimize direct market impact through batched auctions—the psychological effect on investors remains considerable.
The timing of this liquidity event is notably poor. Ethereum, the second-largest digital asset by market capitalization, has declined nearly 38% since the start of the year, a bearish trajectory comparable only to the downturns witnessed in 2018 and 2022. A significant divergence from traditional markets is also evident: as gold and major equity indices like the S&P 500 have held steady or advanced, crypto assets are contending with substantial capital outflows.
Technical and On-Chain Indicators Flash Red
The technical posture remains strained, exacerbated by prevailing investor behavior. On-chain metrics suggest a willingness among many participants to offload holdings even at a loss. The Spent Output Profit Ratio (SOPR) has recently plunged to its lowest level since April 2025, a signal often interpreted as widespread capitulation.
Should investors sell immediately? Or is it worth buying Ethereum?
A formidable resistance wall has solidified around the $2,000 price level. This zone is now populated by a concentration of investors likely to sell on any minor recovery to break even on their initial positions. Concurrently, network analytics show a sharp decline in the creation of new addresses, indicating diminished interest from retail participants. Furthermore, inflows into spot Ethereum ETFs, following a brief period of positivity, have dried up once more.
Long-Term Development Provides a Contrast
Despite the prevailing price weakness, foundational work on the Ethereum protocol continues unabated. The Ethereum Foundation has confirmed its development priorities for 2026, which include two major network upgrades currently dubbed “Glamsterdam” and “Hegotá.” These technical overhauls aim to dramatically enhance scalability and further reduce transaction costs. Such fundamental progress may serve as a stabilizing force in the long run, even if it offers little immediate relief for current market pessimism.
As of the latest data, Ethereum is trading around $1,862, placing it well below the psychologically significant $2,000 resistance area. Whether the current wave of seller exhaustion marks a definitive bottom will likely depend on the influx of fresh institutional capital. Without new liquidity, bulls may find it exceedingly difficult to mount a sustained breakout above the massive supply zone near $2,000.
Ad
Ethereum Stock: Buy or Sell?! New Ethereum Analysis from February 23 delivers the answer:
The latest Ethereum figures speak for themselves: Urgent action needed for Ethereum investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 23.
Ethereum: Buy or sell? Read more here...