Ethereum Leads Crypto Crash...580,000 Retail Investors Hit by Forced Liquidations

▲ Ethereum (ETH)

Ethereum (ETH) was swept up in a steep wave of selling within a week, plunging more than 30% and leading a broad sell-off across the cryptocurrency market.

According to cryptocurrency media outlet Cointelegraph on February 6 (local time), Ethereum has seen more than 30% of its value evaporate over the past seven days, enduring the harshest trial among major altcoins. While Bitcoin (BTC), the market leader, slid to around $60,255—its lowest level since October 2024—Ethereum broke below the psychological $2,000 threshold, becoming the trigger for a broader market collapse. Ethereum’s steeper decline compared with Bitcoin has fueled intense fear among investors.

Experts point to a rapid withdrawal of funds by institutional investors as the primary driver behind the crash. Large outflows from Ethereum spot ETFs operated by major asset managers, including BlackRock, have drained market liquidity. In the futures market, approximately $2.6 billion in assets were liquidated, amplifying downward pressure. Ethereum long-position liquidations accounted for a dominant share, creating a chain reaction in which falling prices triggered additional panic selling.

Chart analysts see Ethereum’s next support level around $1,500. Markus Thielen, founder of 10x Research, warned that “Ethereum has entered a very precarious zone from a technical analysis perspective.” Analyst Peter Brandt also presented a bearish scenario suggesting Ethereum could retreat to the $1,200 level, urging caution among investors. Currently, Ethereum is flashing oversold signals across major indicators, including the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI).

Shifts in the broader economic environment are also weighing on Ethereum’s price. A correction in artificial intelligence–related tech stocks, combined with regulatory uncertainty under the Donald Trump administration, has driven risk-averse sentiment to extremes. As market participants closely watched policy signals from the Trump administration, selling pressure on altcoins intensified after the Treasury secretary nominee ruled out rescue measures for Bitcoin. Ethereum is also showing clear declines in network usage and active addresses, raising concerns about weakening fundamentals.

Meanwhile, on-chain data from Santiment indicates that whale investors are still depositing large amounts of Ethereum into exchanges.

*Disclaimer: This article is for investment reference purposes only, and no responsibility is assumed for investment losses incurred based on its content. The information should be interpreted solely for informational purposes.*

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