Ethereum Faces Mounting Sell-Off Pressure

A sharp downturn has gripped the cryptocurrency sector in early February, with Ethereum bearing a significant portion of the selling pressure. The world’s second-largest digital asset has breached crucial support levels, with its price currently fluctuating between $2,100 and $2,150. Market-wide liquidations across major cryptocurrencies like Bitcoin and Ethereum totaled over $704 million within a single 24-hour period, prompting analysis of the underlying causes.

Leverage and Macroeconomic Headwinds Amplify Decline

The current price slump reflects a broad retreat from speculative investments. Growing uncertainty regarding the timing of anticipated interest rate cuts, coupled with weakness in technology stocks, has driven investors to reduce risk exposure. Cryptocurrencies are typically among the first asset classes to experience selling pressure in such an environment.

This situation has been exacerbated by leverage dynamics. In the weeks preceding the sell-off, a substantial number of speculative long positions had accumulated. When Ethereum fell below key technical thresholds, it triggered a cascade of stop-loss orders. This domino effect led to forced liquidations of leveraged positions, accelerating the downward price movement far more rapidly than standard spot selling would have.

Institutional Buyers Remain on the Sidelines

Unlike during previous market corrections, aggressive buying from institutional investors has been notably absent this time. Since the start of the year, inflows into Ethereum-based investment products have presented a mixed picture, suggesting tactical positioning rather than strong conviction. This institutional hesitation leaves the asset vulnerable to sustained downward pressure.

Should investors sell immediately? Or is it worth buying Ethereum?

Ethereum-specific concerns are adding to the negative sentiment. Ongoing debates about the economic viability of its Layer-2 scaling solutions and intensifying competition among smart-contract platforms are weighing on market psychology. While Bitcoin and other cryptocurrencies posted stronger gains recently, Ether’s performance lagged—a dynamic that reportedly contributed to leadership changes within the Ethereum Foundation late in 2025.

Technical Indicators Signal a Firm Downtrend

Key technical metrics confirm the bearish trend. The Chaikin Money Flow indicator remains firmly in negative territory, signaling persistent capital outflows. The Average Directional Index, reading near 39, indicates a well-established trend is in place. Broader market nervousness is evident in prediction markets, which currently assign a 56% probability that Bitcoin will fall below $70,000 before February ends.

Development Roadmap Progresses Unabated

Despite the challenging price action, Ethereum’s core development continues forward. Two major upgrades are slated for 2026: “Glamsterdam” in the first half of the year, intended to introduce block-level Access Lists and enshrined Proposer-Builder Separation. The “Hegota” upgrade, expected in the latter half of the year, will likely implement Verkle Trees to reduce data storage requirements for node operators. This follows the December 2025 rollout of the Fusaka upgrade featuring PeerDAS, which marked a shift to a faster protocol update cycle.

Whether these technological advancements can provide short-term price support remains uncertain. As long as macroeconomic conditions remain unfavorable and major buyers stay cautious, market volatility is likely to persist.