Ethereum faces a severe downturn with major ETF outflows, $224M in liquidations, and declining on-chain activity. Price drops over 32% as institutional confidence wanes.
The Ethereum network is confronting a severe market downturn, driven by a confluence of negative factors. A sharp decline in price is being fueled by substantial outflows from exchange-traded funds and the forced unwinding of leveraged positions, while on-chain metrics point to waning user activity. Transactions linked to co-founder Vitalik Buterin have further unsettled the investor community.
A clear signal of eroding institutional sentiment is visible in the ETF space. U.S.-based spot Ethereum ETFs recorded net outflows of nearly $50 million on February 23, followed by a further withdrawal of over 25,000 ETH the following Tuesday. Since late January, the assets under management in these funds have plummeted dramatically from $18.6 billion to just $11.9 billion. This sustained capital flight suggests major players are aggressively de-risking their portfolios in the current climate.
The downward momentum has been accelerated by a wave of liquidations. Over a 48-hour period, approximately $224 million worth of long positions were forcibly closed. This cascade of selling has applied significant additional pressure on Ether’s price. The cryptocurrency is currently trading around $1,906, marking a monthly loss exceeding 32 percent. Market observers note that recent sales from wallets associated with Vitalik Buterin have added to the already fragile market mood.
Fundamental usage data underscores the prevailing challenges. The Total Value Locked (TVL) within Ethereum’s DeFi ecosystem has fallen to $51 billion, its lowest point since May 2025. Concurrently, network fee revenue has collapsed. Over the past 30 days, these fees totaled a mere $13.7 million, a stark decline from the $33 million average seen at the end of 2025.
Should investors sell immediately? Or is it worth buying Ethereum?
Activity in the derivatives market highlights the dominant risk-off attitude. An increased premium for put options indicates that traders are seeking more protection against further price declines. Analysts suggest that as long as these key metrics fail to show signs of stabilization, the world’s second-largest cryptocurrency will likely remain under persistent selling pressure.
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