Ethereum’s decline unfolded gradually as macroeconomic pressures, the unwinding of leverage, and diminishing liquidity impacted the price structure. As downside momentum intensified, Ethereum fell beneath the $1,980 mark on February 21st, squeezing profitability among key holder groups. This breakdown was not an isolated incident; it came on the heels of prolonged distribution, derivatives deleveraging, and a diminished risk appetite across substantial balance sheets. As prices declined, unrealized losses proliferated across all whale categories, ranging from 1,000–10,000 to 100,000+ ETH wallets.
Spot is currently trading beneath the $2,075 mega-holder cost basis, indicating that even the largest addresses are experiencing losses. Long-term holders are hovering around breakeven, while short-term cohorts are significantly underwater at approximately 0.5. Amidst the prevailing pressure, on-chain positioning indicates a measured approach to selling. Realized cap trends reveal that whales are primarily in a holding pattern instead of distributing, indicating a strategy of absorption. Historically, this type of cohort-wide stress serves as a test of conviction, indicating that unrealized pain often comes before a bottom formation driven by accumulation, rather than signaling a structural exit.
Vitalik’s sales resurface against the backdrop of increasing pressure from whale losses. Liquidity absorption trends persisted in their evolution, even as wallets associated with founders shifted back to distribution flows. This activity has been ongoing for some time. A fortnight earlier, Vitalik had already executed smaller ETH sales, establishing a staggered disposal pattern instead of a single liquidation event. The recent withdrawal of 3,500 ETH, valued at around $6.95 million, from Aave indicates a trend of continuation rather than an abrupt capitulation. This pacing stands in contrast to distress selling, where substantial volumes usually flood exchanges in a rapid manner.
Collateral withdrawals indicate a potential treasury rebalancing or a strategic liquidity repositioning. The observed flows are consistent with the increasing unrealized losses among whale cohorts. Nonetheless, on-chain positioning indicates a lack of significant aggressive distribution. The activity indicates a careful approach to loss management instead of a hasty withdrawal. Although founder sales can sway sentiment, their magnitude in this context indicates a cautious portfolio adjustment amid a delicate market landscape.