Ethereum Plunges to Nine-Month Low Amid Forced Selling Frenzy

Ethereum CRYPTO000ETH

The world's second-largest cryptocurrency, Ethereum, has been pushed to its lowest valuation in more than nine months. A severe market correction, driven by a confluence of forced liquidations and broader macroeconomic pressures, has shattered key price levels, with ETH now trading significantly below the $2,000 threshold.

External economic concerns are acting as a significant drag on crypto asset prices. Growing speculation about a more hawkish monetary policy stance from the U.S. Federal Reserve, particularly regarding its future leadership, has strengthened the U.S. dollar. This dynamic typically weakens risk-sensitive investments like cryptocurrencies. Concurrently, a pronounced flight to safety is benefiting traditional havens such as gold, which is demonstrating far greater stability than its digital counterparts.

This adverse environment has catalyzed a dramatic price decline. Ethereum is currently changing hands near $1,872, representing a staggering drop of over 33% in just the past week. This move has also established a new 52-week low for the asset.

A Cascade of Billion-Dollar Liquidations

The immediate catalyst for the steep descent was a massive deleveraging event on February 1, which some traders have dubbed "Black Sunday II." Within a 24-hour window, leveraged positions worth approximately $2.2 billion were forcibly closed out—marking the largest single-day liquidation event since October 2025.

The selling pressure has not subsided. Data from this week indicates subsequent waves of liquidations have erased an additional $700 million in value. Market analysts describe a classic downward spiral: falling prices trigger margin calls for highly leveraged investors, including major holders known as "whales," forcing them to sell assets to repay loans on decentralized finance (DeFi) protocols like Aave. Reports indicate that two large investors alone offloaded ETH holdings valued at $371 million within 48 hours to cover their debts.

Network Development Progresses Unabated

Ironically, Ethereum's core technological development continues unaffected by the market turmoil. Following the successful "Fusaka" upgrade in December, an increase in "blob limits" was activated in January to enhance the network's data processing capacity. The next major upgrade, codenamed "Glamsterdam," is already slated for the first half of 2026.

Co-founder Vitalik Buterin recently emphasized that fundamental scalability challenges are being addressed through new technologies like "PeerDAS." However, these long-term fundamental improvements are being almost entirely ignored by a market currently dominated by fear and forced selling.

Path to Stabilization

The breach below $1,872 signifies a decisive breakdown of crucial support zones that were previously holding around $2,100. While developer activity remains robust, the short-term price action is being dictated by the aggressive unwinding of overleveraged positions. A sustained period of calm is unlikely until the liquidation waves across futures markets and DeFi protocols fully subside, potentially paving the way for market stabilization.

@ boerse-global.de | CRYPTO000ETH ETHEREUM