ether It has recently been criticized from all sides, falling below $2,000, with selling pressure coming from all aspects of the market, including Ethereum founder Vitalik Buterin and derivatives traders.
The second-largest cryptocurrency is currently trading around $1,950, down 60% since August and 42% since January 14.
Its woes are partly due to what analysts call the latest cryptocurrency bear market, but ETH itself has lagged other large-cap stocks like BTC, XRP and ADA, which have fallen nearly 35% since mid-January.
Vitalik Buterin and a recent wave of selling among derivatives traders have driven the divergence from peers.
Onchain analysts noted that one entity offloaded a large amount of ETH on a decentralized derivatives venue to repay a loan on Aave.
According to data shared on the MLm chain, the wallets involved have sold approximately 47,000 ETH ($120 million) in the past four days, with approximately 31,700 ETH sold in just 5 hours.
They still have nearly 50,000 ETH as collateral on Aave and have borrowed approximately $86 million in USDC against Aave. The position is now hovering near liquidation levels as ETH slips, forcing more selling to remain above the surface.
This is a feedback loop that Ethereum holders have seen before: price falls, collateral weakens, debt is repaid, and more Ethereum enters the market.
ETH’s decline is more severe than other currencies
Part of the reason Ethereum has fallen particularly hard is that it remains the asset of choice for cryptocurrency leverage, meaning that when traders are forced to liquidate their positions, Ethereum is often the first to be sold.
But it also reflects the market’s current struggle to find reasons to buy.
Former White House communications director Anthony Scaramucci believes that Ethereum is in trouble due to institutional investors’ bias against Bitcoin.
“I think what’s going to happen when institutions come in is they’re probably going to buy the oldest assets,” Scaramucci told OANDA in an interview. “So this is Bitcoin. Now, would you say, is it possible for them to buy Ethereum? I would say yes… but I would say that institutions in general would favor something like Bitcoin. That’s not to say it won’t spread over the next few years, but that’s where it is right now.”
There is also a corner of the market that attempts delta neutral trading, buying spot ETH and lending it out on platforms like Aave while shorting the asset on futures. These traders have no directional exposure, but may need to increase short positions if funding rates deviate, which could create greater selling pressure.
Treasury buyers feel the same way
One of the more optimistic developments for Ethereum over the past year has been the rise of so-called ETH treasury companies, which buy and hold ETH in MicroStrategy-style bets.
The idea is that businesses will provide a new class of long-term buyers, helping absorb supply and ground the market.
That hasn’t really happened yet.
With ETH down more than 50% since August, many of these companies are losing money, having accumulated funds at prices that seemed reasonable at the time but painful in hindsight.
Tom Lee’s BitMine (BMNR) is the most famous example. Lee has always been an Ethereum bull, and BitMine’s ETH position is positioned as strategic rather than speculative.
BitMine currently holds 4.29 million ETH tokens worth $9 billion, 57% of which are pledged to earn revenue. Dropstab data shows that a total of $16.3 billion was invested, resulting in $7.3 billion in unrealized losses.
The firm even bought on the dip earlier this month, buying $100 million in ETH at $2,300, but the purchase failed to stem ongoing selling pressure as ETH subsequently fell below $2,000.
But it’s hard to play the “strong hand” role when assets continue to decline and everyone else is selling on the dip.
Instead of being supportive, these Treasury holdings are starting to look like another unresolved issue — not because they’re selling off today, but because the market knows they’re in trouble.
No obvious buyer
The problem with Ethereum right now is not a single wallet or a single clearing.
Selling pressure comes from all directions: founders cutting exposure, leveraged traders unwinding positions, and underwater holders seeking exits.
Ethereum remains the dominant smart contract platform. None of this has changed.
But in this market, ETH is not traded based on fundamentals. It trades like an asset that no one wants to grab.
Except, obviously, Tom Lee.