Ether (ETH) has recently faced intense selling pressure, causing its price to fall below the $2,000 mark. This downturn is driven by a variety of market participants, including Ethereum’s creator Vitalik Buterin and traders involved in derivatives.
Currently valued near $1,950, Ether has experienced a significant decline—dropping approximately 60% since August and about 42% since mid-January.
This slump partly reflects the broader crypto bear market. However, ETH’s performance lags behind other major cryptocurrencies such as Bitcoin (BTC), XRP, and Cardano (ADA), which have only decreased around 35% over the same period.
The gap between ETH and its peers widened due to large-scale sell-offs from Vitalik Buterin as well as recent liquidations by derivatives traders.
On-chain data reveals that certain wallets have been offloading substantial amounts of ETH on decentralized derivatives platforms to repay loans taken out on Aave.
Over the past four days alone, these wallets sold roughly 47,000 ETH—equivalent to about $120 million—including nearly 31,700 ETH within just five hours according to MLm onchain analytics.
Despite these sales, nearly 50,000 ETH remain locked up as collateral on Aave with approximately $86 million borrowed in USDC against it. As Ether’s price continues declining toward liquidation thresholds for these positions, further selling is likely necessary for borrowers to avoid forced liquidations.
This creates a vicious cycle familiar to many Ether holders: falling prices weaken collateral value; debts must be repaid; more ETH floods the market through sales—exacerbating downward pressure even further.
The Steeper Decline of Ether Compared To Other Cryptos
A key reason behind Ether’s sharper drop is its role as a preferred asset for leveraged trading within crypto markets. When traders are compelled to unwind positions rapidly under stress conditions like this one, ETH often becomes their first choice for liquidation.
Moreover, a lack of compelling buying interest adds fuel to this downtrend.
Anthony Scaramucci—a former White House communications director—noted that institutional investors tend favor Bitcoin over Ethereum when entering crypto markets due primarily because BTC is considered “the oldest asset.”
“Institutions typically gravitate towards Bitcoin initially,” Scaramucci explained during an interview with OANDA. “While they might eventually diversify into Ethereum over time,… right now Bitcoin dominates institutional inflows.”
Certain market participants engage in delta-neutral strategies involving simultaneously holding spot ETH while shorting futures contracts or lending tokens via platforms like Aave. Though directionally neutral, if funding rates shift unfavorably, these traders may need increased short exposure which could trigger additional selling pressure.
Treasury Buyers Also Feeling Pressure
An optimistic trend last year was growth among so-called “Ethereum treasury companies”—corporate entities accumulating $ETH, akin to MicroStrategy’s approach with BTC—to provide steady demand supporting prices.
The hope was that long-term corporate holders would absorb excess supply and establish price floors.
Unfortunately , this hasn ’ t materialized .
With & lt ; span class = & quot ; ticker & quot ; & gt ; $ETH & lt ; / span & gt ; having dropped more than half since August , many such firms now face significant unrealized losses after acquiring tokens at previously reasonable valuations .
Tom Lee ’ s BitMine ( BMNR ) exemplifies this dynamic . Lee remains bullish but BitMine ’ s massive holdings — currently totaling around 4.29 million tokens worth roughly $9 billion , with most staked — reflect strategic rather than speculative intent .
According data from Dropstab , total investments amounting close $16.3 billion yield paper losses exceeding seven billion dollars.
Even after purchasing an additional $100 million worth of ether earlier this month at about two thousand three hundred dollars per token , BitMine couldn ’ t halt continued downward momentum pushing prices below two thousand dollars.