Ether Rebounds From $1.8K Support While Various Market Indicators Signal Extended Bearish Pressure
Multiple warning signs emerge for Ethereum as blockchain transaction costs and network TVL reach multi-year lows. ETH price vulnerability persists until derivatives data shows improvement.
Key takeaways:
- Liquidations in ETH futures contracts hit $224 million following a 9% decline in value, as blockchain activity on the network dropped to its lowest point in 12 months.
- Ethereum's strong price correlation with Bitcoin combined with significant withdrawals from exchange-traded funds indicate potential for additional ETH price declines.
The price of Ether (ETH) crashed down to the $1,800 level on Tuesday, eliminating $224 million worth of leveraged long positions within a 48-hour window. The 14% decline in value witnessed over the past 10 days has pushed leading traders into a defensive stance. Data from options and futures markets, combined with lackluster blockchain activity and continuous withdrawals from Ether spot exchange-traded funds (ETFs), all suggest that the $1,800 support level remains fragile.
While demand between put (sell) and call (buy) options remained relatively even from Monday through Saturday, the situation changed dramatically on Tuesday. The put-to-call volume premium for ETH surged to 2.2x, indicating a rapid rush toward downside hedging. Although some market participants may have written puts in anticipation of a price recovery, the overall market appears to be positioning itself for increased volatility ahead.
On Tuesday, the delta skew for options (put-call) registered at 18%, indicating that put options commanded a significant premium. This imbalanced demand demonstrates that protective hedging has become the main focus at present. There is an evident shortage of bullish conviction, despite ETH trading 63% beneath its record high. Much of this pessimism stems from particularly disappointing onchain metrics.
The Ethereum network's total value locked (TVL) has declined to $51 billion, marking the lowest figure observed since May 2025. As fewer deposits flow into decentralized applications (DApps), transaction fees on the network have dropped to $13.7 million during the past 30 days. This represents a significant decrease from the $33 million average recorded in late 2025. Market participants are expressing concern that demand for ETH in data processing activities may remain suppressed for an extended period.
Despite being anticipated, the recent $7 million worth of ETH sales associated with Ethereum co-founder Vitalik Buterin have done little to improve market sentiment. In January, the Ethereum co-founder designated ETH 16,384 from his personal wallet as charitable contributions to support privacy-focused technologies, open source hardware and secure, verifiable software systems. Nonetheless, the perception surrounding this action contributed an additional element of bearish sentiment to an already turbulent week.
Withdrawals from Ether ETFs have further deteriorated investor confidence. Typically, this type of capital movement signals waning interest from institutional market participants.
Since Feb. 11, US-listed Ether ETFs have experienced $405 million in net withdrawals, driving total assets under management down to $12.4 billion. This capital rotation occurred simultaneously as gold prices surged past $5,150. During the week ending Feb. 20, gold ETFs attracted $822 million in fresh capital, based on data from gold.org.
While Ether's disappointing onchain and derivatives metrics don't necessarily spell disaster, the evidence that whales and market makers appear to be preparing for additional downside certainly amplifies bearish sentiment. At present, Ether's price movement remains tightly coupled to Bitcoin (BTC), with the two assets maintaining a 20-day correlation exceeding 95% throughout the past three weeks.
The decline of ETH to $1,800 has established a sort of feedback loop, leaving traders uncertain about the true catalysts behind this cryptocurrency bear market. This ambiguity is compelling traders to exit positions at unfavorable prices, and conditions may persist while professional market participants continue exhibiting fear. Unless these derivatives indicators show signs of stabilization, the possibility of ETH experiencing further downward movement remains a legitimate concern.