Journalist
Posted:
Ethereum’s decline unfolded progressively as macro pressure, leverage unwinds, and thinning liquidity weighed on price structure.
As downside momentum accelerated, Ethereum [ETH] slipped below the $1,980 threshold on the 21st of February, compressing profitability across major holder groups.
This breakdown did not occur in isolation; it followed sustained distribution, derivatives deleveraging, and reduced risk appetite across large balance sheets.
As prices weakened, unrealized losses spread simultaneously across all whale cohorts, from 1,000–10,000 to 100,000+ ETH wallets.
Spot now trades below the $2,075 mega-holder cost basis, confirming losses even among the largest addresses.
Source: CryptoQuant
Long-term holders hovers near breakeven, while short-term cohorts remain deeply underwater near 0.5.
Despite this pressure, on-chain positioning shows restrained sell behavior. Realized cap trends indicate whales are largely holding rather than distributing, suggesting strategic absorption.
Historically, such cohort-wide stress reflects conviction testing, where unrealized pain precedes accumulation-led bottom formation rather than structural exit.
Vitalik’s sales re-emerge amid broader whale loss pressure
Liquidity absorption trends continued to develop even as founder-linked wallets returned to distribution flows. This activity did not begin recently.
A fortnight earlier, Vitalik had already conducted smaller ETH sales, forming a staggered disposal pattern rather than a single liquidation event.
The latest withdrawal of 3,500 ETH, worth approximately $6.95 million, from Aave [AAVE] therefore reflects continuation, not sudden capitulation.
Source: LookOnChain
This pacing differs from distress selling, where large volumes typically hit exchanges quickly. Instead, collateral withdrawals suggest treasury rebalancing or liquidity repositioning.
These flows also align with rising unrealized losses across whale cohorts. However, on-chain positioning shows limited aggressive distribution.
The activity therefore reflects cautious loss management rather than a panic exit.
While founder sales can influence sentiment, their scale here signals measured portfolio adjustment within a fragile market environment.
Kalshi markets price heavy on ETH weakness
Downside expectations sharpened on Kalshi as Ethereum traded near $1,975, reflecting rising caution across large-holder positioning.
Market odds now price an 85% probability of breaching $1,750, while 49% anticipate a decline below $1,250. Deeper capitulation scenarios remain visible, with 30% odds assigned to sub-$1,000 levels.
Source: X
This pricing shift aligns with renewed founder-linked sales and ongoing whale liquidity adjustments. As unrealized losses expand, sentiment weakens alongside treasury rebalancing flows.
Yet historically, such fear-weighted probabilities have clustered near capitulation zones, where distressed distribution often precedes broader recovery stabilization.
Final Summary
- Cohort-wide unrealized losses, restrained whale selling, and staggered founder distribution collectively reflect conviction testing rather than disorderly capitulation.
- Ethereum now hovers between late-stage bottom formation and extended cycle compression, with downside probabilities surging even as absorption persists.
