Key takeaways:

• ETH futures liquidation reached $224 million after the price fell 9%, while the network’s onchain activity fell to a 12-month low.

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• ETH’s high correlation with Bitcoin and massive outflows from exchange-traded funds suggest further risk of a decline in the Ether price.

Ether (ETH) fell to $1,800 on Tuesday, wiping out $224 million in leveraged bullish positions in 48 hours. This 14% price drop over the last 10 days has left top traders on the defensive. Options and futures data, sluggish supply chain activity, and steady outflows from exchange-traded funds (ETFs) point to a tentative low at $1,800.

After demand for put and call options remained fairly balanced from Monday to Saturday, the situation quickly changed on Tuesday. ETH sales volume premium jumped to 2.2x, showing a sudden scramble for downside protection. While some may have sold puts in response to the price rebound, the broader market appears to be bracing for more volatility.

The delta value of options (put-call) was 18% on Tuesday, which means that sell transactions were quoted at a clear premium. This uneven demand shows that hedging is currently the priority. There is a real lack of confidence here, even with ETH sitting 63% below its all-time high. Much of this frustration comes down to some rather delicate onchain numbers.

The total value locked (TVL) on Ethereum fell to $51 billion, the lowest level since May 2025. With fewer deposits going to decentralized applications (DApps), network fees have increased to $13.7 million in the last 30 days. This is a far cry from the $33 million average seen at the end of 2025. Traders fear that demand for ETH for data processing won’t return any time soon.

While this was expected, the recent $7 million ETH sale linked to Ethereum co-founder Vitalik Buterin did not improve sentiment. The Ethereum co-founder committed 16,384 ETH from his personal holdings as a donation in January to fund privacy technologies, open source hardware and secure, verifiable software systems. Still, the optics of the move added another layer of bearish pressure to an already uncertain week.

Outflows from Ether ETFs have only worsened investor sentiment. Typically, this type of move means that institutional players lose interest.

Related: Ether’s longest decline since 2022 ignored by whales – what’s next for ETH?

Since February 11, there has been a net outflow of USD 405 million from US-listed Ether ETFs, which has reduced the total value of assets under management to USD 12.4 billion. This change occurred right after the gold price rose above $5,150. According to gold.org, gold ETFs actually brought in $822 million in the week ending February 20.

Poor Ether supply chain and derivatives data is not a guaranteed death sentence. However, the fact that whales and market makers seem to be preparing for further declines is definitely fueling bearish sentiment. The price of ether is also currently tied to Bitcoin (BTC) as the asset’s 20-day correlation has remained above 95% for the past three weeks.

The drop in ETH to $1,800 has created a bit of a loop where investors are still guessing what is really driving this cryptocurrency bear market. This uncertainty forces traders to sell at a loss, and the situation may not change until professional traders show fear. Until the indicators of these derivatives stabilize, the chances of ETH falling further are still considered.