U.S. spot Ethereum ETF investors are demonstrating a level of resilience akin to that of their Bitcoin counterparts, yet they are said to be experiencing heightened market distress. In the midst of the ongoing crypto downturn, analyst James Seyffart highlighted that ETH ETF purchasers have decreased by +40% from their cost basis of $3,520. “Ethereum ETF holders find themselves in a more challenging situation compared to their Bitcoin ETF counterparts. It’s a painful proposition.” However, Seyffart noted that investors have faced comparable market distress previously in early 2025. In the first quarter of 2025, amidst the Trump tariff wars, the price of ETH experienced a significant decline of 60%, closely mirroring the recent drop to $1.8K. In a surprising turn of events, ETH ETF holders remained largely unfazed, experiencing merely around $1 billion in outflows amidst the bearish sentiment that swept through early 2025. But will such resilience be mirrored in the drawdown of 2026? Seyffar reports that ETH investors are facing significant selling pressure yet remain steadfast in their positions.
“Still, the vast majority of buyers have remained in their positions. The net inflows into the ETH ETFs have decreased from approximately $15 billion to under $12 billion”. He stated, “This selloff is significantly more severe than the Bitcoin ETFs when comparing the two, yet it still reflects a relatively strong commitment from investors in the broader context (at least for the moment).” During the same timeframe, BTC ETFs experienced minimal outflow. Nonetheless, the $4 billion in ETH ETF outflows could merely be the start if the wider bear market unfolds in line with historical trends. In the near term, Options traders were actively hedging against downside risk to $1.6K and $1.9K, as indicated by the top volumes (red) over the past 24 hours. This highlighted the need for short-term caution in anticipation of U.S. macro data set to be released on February 13th.
However, the Singapore-based crypto trading desk highlighted that ETH might establish a base prior to Friday’s inflation print, which could influence risk appetite and expectations regarding Fed rate cuts. In a recent market update, the firm stated, “Spot $ETH ETFs saw a resurgence with $57m of inflows following three days of outflows, coupled with ongoing accumulation from Tom Lee’s BitMine, which is contributing to stabilizing the narrative surrounding Ethereum after a challenging week.” At this time, ETH was trading at $1.95K and may face a downturn if the 2026 bear market mirrors the pattern observed in 2022.
If the close correlation with the 2022 trend persists, ETH could potentially establish a bottom in the $1000-$1200 range by the end of March 2026. At the time of writing, ETH ETF holders found themselves 43% underwater as the price dipped to $1.95K. While investors navigated comparable market turmoil in early 2025, an additional downturn could put them under significant pressure.