Journalist
Published:
Ethereum’s decline unfolded gradually as macroeconomic pressure, reduced leverage, and reduced liquidity weighed on the price structure.
As bearish momentum accelerated, Ethereum (ETH) fell below $1,980 on February 21, compressing the profitability of major holder groups.
This rupture did not occur in isolation; this followed sustained distribution, deleveraging of derivatives and a reduction in risk appetite in large balance sheets.
As prices weakened, unrealized losses spread to all cohorts of whales simultaneously, from 1,000 to 10,000 to over 100,000 ETH wallets.
Spot is now trading below the mega-holder’s cost base of $2,075, confirming losses even among the largest addresses.
Source: CryptoQuant
Long-term holders are near break-even, while short-term cohorts remain deep underwater, near 0.5.
Despite this pressure, on-chain positioning shows restrained sales behavior. Realized cap trends indicate that whales are largely holding rather than distributing, suggesting strategic absorption.
Historically, such cohort-wide stress reflects tests of conviction, where unrealized pain precedes the formation of an accumulation-induced trough rather than a structural exit.
Vitalik sales reemerge amid broader pressure over loss of whales
Cash absorption trends continued to grow even as founder-linked portfolios returned to distribution flows. This activity has not started recently.
Fifteen days earlier, Vitalik had already made smaller sales of ETH, forming a staggered disposal pattern rather than a single liquidation.
The latest withdrawal of 3,500 ETH, worth approximately $6.95 million, from Aave (AAVE) therefore reflects a continuation and not a sudden capitulation.
Source: LookOnChain
This pace differs from that of distress sales, where large volumes generally arrive quickly on exchanges. Rather, withdrawals of collateral suggest a rebalancing of cash flow or a repositioning of liquidity.
These flows also align with increasing unrealized losses within whale cohorts. However, on-chain positioning shows limited aggressive distribution.
The activity therefore reflects prudent management of losses rather than an escape from panic.
Although founder sales can influence sentiment, their magnitude here signals measured portfolio adjustment in a fragile market environment.
Kalshi Markets Price ETH Weakness Heavily
Downward expectations have deepened Kalshi as Ethereum traded near $1,975, reflecting growing caution towards positioning by large holders.
Market odds now put the probability of breaking above $1,750 at 85%, while 49% predict a decline below $1,250. Deeper capitulation scenarios remain visible, with a 30% probability assigned to levels below $1,000.
Source:
This price change aligns with renewed founder-related sales and continued whale liquidity adjustments. As unrealized losses increase, confidence weakens alongside cash flow rebalancing.
Yet historically, these fear-weighted probabilities have clustered near areas of capitulation, where the distribution of hardship often precedes a broader stabilization of recovery.
Final Summary
- Cohort-wide unrealized losses, restricted whale sales, and staggered distribution of founders collectively reflect tests of conviction rather than disorderly capitulation.
- Ethereum is now oscillating between late-stage bottom formation and extended cycle squeeze, with downside probabilities increasing even as absorption persists.
