Ethereum has perhaps taken the largest hit of all the large-cap altcoins in February, with its value dropping by more than 36% over the past month. The second-largest cryptocurrency deepened its woes over the past week, struggling to keep its price above the $2,000 level.
On Friday, February 27th, the price of Ethereum fell by more than 5%, falling to just above the $1,900 mark. Interestingly, a recent on-chain evaluation shows the potential reason behind the altcoin’s latest struggles below $2,000.
In a February 27th post on the social media platform, crypto pundit Maartunn revealed the source of the recent bearish pressure witnessed by the Ethereum price. The relevant on-chain indicator here is the Taker Sell Volume, which saw steady spikes across all exchanges throughout Friday.
For context, the Taker Sell Volume metric measures the total volume of sell orders filled by takers (market participants who match existing orders created by market makers) in Ethereum perpetual swaps. Hence, a rise in the indicator can be interpreted as a bearish signal, implying that the market is being flooded with sell orders.
As observed in the chart above, the Ethereum Taker Sell Volume rose as high as 105 million ETH on Friday. Now, this puts some context to the fall in the ETH price seen on the day, as the spike in this metric is a sign of heavy selling pressure in the market earlier.
The price of ETH, which started the day above the $2,000 mark, soon dropped to around $1,920 as the weekend approached.
As of this writing, the price of ETH stands at around $1,925, reflecting an over 5% decline in the past 24 hours. However, the past week’s action was relatively mild, with the second-largest cryptocurrency losing nearly 2% of its value in the past seven days.
The selling pressure witnessed by the Ethereum price over the past day is not new, as it has been the case over the past few weeks. This trend can be seen in the recent performance of ETH exchange-traded funds (ETFs).
According to recent market data, the US-based Ethereum ETFs have seen roughly 563,600 ETH (worth nearly $1.13 billion) withdrawn by investors over the past five weeks. This significant ETF outflow highlights the shift in investor sentiment and demand since the last week of January.
Market sentiment and demand need to shift optimistically for the ETH price to witness a bullish reversal soon.
