Ethereum is making efforts to find stability near the $2,000 mark as the wider crypto market displays cautious indications of recovery. Following weeks of relentless pressure, the price action has halted its downward trajectory, yet the overall sentiment continues to be precarious. The recent rebound has alleviated immediate downside momentum; however, the technical structure continues to indicate a market that is recovering from substantial damage instead of transitioning into a confirmed uptrend. An analyst reports that Ethereum faced a significant liquidation-driven sell-off in recent weeks, plummeting from local highs close to $3,300 to lows near the $1,850 mark. The significance of this move is highlighted when examining the Net Taker Volume (30-day moving average), a key metric that captures aggressive market order activity. In February, this indicator dropped to its most negative level since last November, underscoring the strong presence of aggressive sellers throughout the decline. Such extreme negative readings usually indicate a response driven by panic rather than a systematic approach to repositioning. When taker volume skews significantly towards the sell side, it frequently indicates forced exits, stop-outs, and cascading liquidations throughout the derivatives markets. Ethereum’s struggle to maintain the $2,000 mark indicates a potential reduction in immediate selling pressure.
However, the data reveals that the market has just weathered one of its most severe waves of downside activity in recent months. The prevalence of striking red bars in Ethereum’s Net Taker Volume highlights the extent to which sellers dominated the order books amid the recent downturn. When taker sell orders consistently outnumber taker buy orders to such a degree, it indicates a sense of urgency. This isn’t a case of passive distribution; rather, it’s market participants aggressively hitting bids, frequently under pressure. The interplay of panic-induced sell-offs, strategic short placements, and obligatory long liquidations probably intensified the drop from $3,300 to below $1,900. Significantly, the sole substantial cluster of green bars — indicative of aggressive buying — appeared in mid-January, aligning with Ethereum’s local peak around $3,400. The brief uptick in demand could not maintain its momentum, leading to a reestablishment of sell-side dominance. This pattern indicates that the upside liquidity was depleted prior to the onset of a wider deleveraging cycle. Extreme negative Net Taker Volume readings frequently indicate capitulation phases. Historically, these flushes can signify exhaustion points, as aggressive sellers ultimately exhaust their resources.
Nonetheless, capitulation by itself does not validate a reversal. For a structural shift to take shape, the imbalance must find its equilibrium. A contraction in red bars, succeeded by a period of sustained green dominance, would indicate a resurgence of confidence from aggressive buyers. Ethereum continues to exhibit structural weakness, even with fleeting stabilization efforts around the $2,000 mark. The chart illustrates a distinct breakdown from the $3,400–$3,600 range earlier this year, succeeded by a series of lower highs and lower lows — a classic downtrend pattern. The recent bounce has not changed this structure. The price is presently positioned beneath the 50-day, 100-day, and 200-day moving averages, with all indicators trending downward. This alignment indicates a prevailing bearish momentum across short-, medium-, and long-term horizons. Significantly, the 50-day average has continued to decline, indicating ongoing selling pressure instead of a fleeting liquidity gap.
The notable drop towards the $1,850 level was marked by a substantial increase in trading volume, indicating potential forced liquidations and intense selling activity. Since then, volume has moderated during consolidation, suggesting that although panic may have subsided, the conviction among buyers continues to be restrained. $2,000 serves more as a psychological pivot than as established support. A sustained move above the 50-day average is necessary to indicate a shift towards improving momentum. On the flip side, not maintaining the current range could expose the market to downside risks, potentially leading to deeper liquidity pockets.