Ethereum posted its most severe weekly decline of the year, wiping out roughly $100 billion in market capitalization and falling nearly 27% over seven days. According to the source material, ETH’s valuation dropped from $365 billion on Jan. 28 to about $265 billion by Feb. 4. During the slide, the token fell to $2,107, its lowest price since May 2025, making it one of the weakest performers among the top crypto assets during the period.
Market Fear Intensified by Institutional Transfer Signals
The broader crypto market has been under pressure from familiar macro headwinds, including geopolitical tensions and stubborn inflation concerns. However, Ethereum’s selloff appears to have been amplified by a more specific trigger. Reports emerged that BlackRock moved $170 million worth of bitcoin and ETH to Coinbase Prime. In crypto markets, such transfers are often watched closely because they can be interpreted as a potential prelude to institutional sales or portfolio rebalancing.
That interpretation appears to have shaken sentiment quickly. Even without confirmation of immediate liquidation, traders often react defensively to large transfers involving major asset managers, especially during already fragile market conditions. In Ethereum’s case, the headline appears to have added to an environment where risk appetite was already weakening, accelerating the downside move as retail participants pulled back.
Price Weakness Contrasts With Strong Staking Demand
Despite the sharp price decline, the source material highlights a more resilient picture beneath the surface. Ethereum’s validator entry queue reportedly expanded to 71 days, signaling strong demand from both institutional and individual participants looking to stake ETH. This matters because heavy staking interest can reduce liquid supply and tighten the market over time.
Analysis cited from Elfa AI suggests that this kind of supply-demand imbalance has, in past market setups, created a foundation for recovery once forced selling subsides. In other words, while short-term sentiment has clearly turned negative, the network’s staking dynamics do not necessarily support the idea of a collapsing long-term thesis. Instead, they suggest that capital is still willing to commit to Ethereum despite near-term volatility.
Valuation Metrics Point to a Critical Support Area
Another notable point in the report is the market value to realized value ratio, or MVRV, which indicates that ETH is approaching an important support zone. Analyst Ali Charts said that if historical patterns repeat, a possible cycle bottom could begin to form just below $1,959. That level is now being watched closely by traders trying to distinguish between a temporary panic event and a broader structural breakdown.
In crypto markets, MVRV is often used to gauge whether an asset is trading at a premium or discount relative to the average on-chain cost basis of holders. When the ratio compresses into historically significant areas, some investors interpret it as a sign that downside may be becoming more limited, even if price action remains weak in the near term.
Technical Structure Still Favors Bears
From a chart perspective, however, Ethereum still appears to be under heavy bearish control. The report says ETH completed the breakdown of an inverse cup-and-handle pattern, with the $2,960 neckline now flipping from former support into a major resistance zone. Based on that technical setup, analysts identified a potential downside target near $1,665.
At the same time, immediate structural support is seen in the $2,100 to $2,200 range, which means the market is currently testing an area that could determine whether sellers remain fully in command. A failure to stabilize around this zone could reinforce expectations for a deeper move lower, while any successful defense could encourage traders to look for a short-term relief rally.
Oversold Signals Are Emerging, but Momentum Has Not Reversed
Momentum indicators show a mixed but still fragile setup. Ethereum’s relative strength index (RSI) has fallen below 30, placing the asset firmly in oversold territory. In many cases, that can signal a rebound is becoming increasingly likely. However, the report notes that the RSI trendline itself is still sloping downward, implying that bearish momentum has not yet fully exhausted itself.
Other indicators reinforce that caution. The MACD histogram remains increasingly negative, while the Chaikin Money Flow (CMF) sits deep in the red. Together, those readings suggest that selling pressure is still overwhelming buying interest and that liquidation-related flows may still be working through the market. In that context, oversold conditions alone may not be enough to mark a definitive bottom.
Long-Term Bulls Remain in Position
Even with the scale of the decline, some long-term institutional bulls appear to be holding their ground. The source notes that Tom Lee continues to back Ethereum despite his firm sitting on an estimated $6 billion unrealized loss tied to a treasury of 4.3 million ETH. That detail underscores an important divide in the current market: short-term traders are responding to volatility and technical breakdowns, while longer-horizon believers continue to frame the weakness as part of a larger cycle.
This divergence is often a defining feature of major correction phases. Sharp losses can force leveraged or short-term positioning out of the market, while conviction-based capital remains focused on adoption, staking participation, and network fundamentals. Whether that conviction is rewarded in the near term will likely depend on how Ethereum behaves around current support levels.
What the Market Is Watching Next
Going forward, traders will likely focus on several key markers. First is whether ETH can hold the $2,100-$2,200 area and avoid a more decisive break lower. Second is whether the market begins to stabilize around the $1,959 zone identified through MVRV-based analysis if selling continues. Third is whether staking demand, as reflected in the 71-day validator queue, translates into a meaningful reduction in available supply once panic selling fades.
For now, Ethereum is caught between two competing narratives. On one side, the charts remain bearish, momentum indicators still show stress, and institutional transfer headlines have added to fear. On the other, network participation remains strong, staking demand is elevated, and valuation metrics suggest the asset may be approaching levels where long-term buyers start paying closer attention.
The result is a market still searching for a floor. Ethereum’s latest plunge has clearly damaged sentiment, but it has not erased the debate over whether this is a capitulation event near cycle support or the beginning of a deeper leg down. Until price confirms either direction, volatility is likely to remain high and both bulls and bears will continue to find evidence for their case.