Ethereum investors are facing a severe test of resolve as a cascade of forced liquidations rocks the cryptocurrency. A sharp market correction has triggered what some traders are calling a second “Black Sunday,” sending the price of ETH spiraling downward to its lowest point in a year. While core blockchain development continues on schedule, risk aversion is dominating trading activity.
Macroeconomic Pressures Weigh on Crypto Assets
Broader financial headwinds are exacerbating the sell-off across digital assets. Growing speculation that the U.S. Federal Reserve may adopt a more restrictive monetary policy has strengthened the dollar. Historically, a robust dollar draws liquidity away from perceived risk-on investments like cryptocurrencies, as capital seeks safer harbors. This macro trend is reflected across the sector, with both Bitcoin and Solana also posting significant declines.
Technical indicators reinforce the bearish outlook. The Chaikin Money Flow (CMF) points to sustained capital outflows, and the ADX indicator confirms a firmly established downward trend. Ethereum’s price has collapsed by more than 35% in a single week, currently trading near $1,820—a 52-week low.
Billions in Leverage Unwound, Sparking Downturn
The immediate catalyst for the plunge was one of the most severe market corrections in recent months. On February 1, leveraged positions worth approximately $2.2 billion were forcibly liquidated. This represents the largest single deleveraging event since October 2025. The unwinding continued throughout the week, with an additional $700 million in positions being closed.
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Reports indicate that large-scale investors also contributed to the selling pressure. To meet obligations on decentralized finance (DeFi) protocols such as Aave, major holders were compelled to offload Ether holdings valued at $371 million.
Development Roadmap Proceeds Uninterrupted
Despite the extreme price volatility, Ethereum’s development timeline remains unaffected. The core development team is adhering to its schedule, following the successful “Fusaka” upgrade in December. The next major update, “Glamsterdam,” is slated for the first half of 2026. This upgrade aims to enhance network decentralization and data processing efficiency, notably through the implementation of enshrined Proposer-Builder Separation (ePBS).
Market Structure Holds the Key to Recovery
In the near term, market mechanics and macroeconomic data are expected to remain the primary price drivers. Analysts suggest that a sustainable price floor may only form once the current cycle of systemic debt reduction is complete and risk appetite among institutional investors shows signs of stabilization.
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