Ethereum has taken one of the biggest hits among major altcoins in February, losing over 36% of its value in the past month. The second-largest cryptocurrency faced further pressure last week, struggling to stay above $2,000. On Friday, February 27th, Ethereum’s price dropped more than 5%, falling to just above $1,900. A recent on-chain analysis may explain why the altcoin has been struggling below the $2,000 mark.
In a February 27th social media post, crypto analyst Maartunn pointed to the source of the recent selling pressure on Ethereum. The key indicator is the Taker Sell Volume, which showed steady increases across all exchanges throughout Friday.
For context, the Taker Sell Volume metric tracks the total volume of sell orders filled by takers—traders who accept existing orders placed by market makers—in Ethereum perpetual swaps. A rise in this metric is typically seen as a bearish signal, suggesting the market is being flooded with sell orders.
As shown in the chart above, Ethereum’s Taker Sell Volume climbed as high as 105 million ETH on Friday. This helps explain the day’s price drop, as a spike in this metric indicates heavy selling pressure. ETH started the day above $2,000 but fell to around $1,920 by the weekend.
At the time of writing, Ethereum is trading around $1,925, down more than 5% in the past 24 hours. Over the past week, the decline has been milder, with the cryptocurrency losing nearly 2% of its value.
The recent selling pressure is part of a broader trend seen over the past few weeks. This pattern is reflected in the performance of Ethereum exchange-traded funds (ETFs). Recent market data shows that U.S.-based Ethereum ETFs have seen outflows of roughly 563,600 ETH (worth nearly $1.13 billion) over the past five weeks. These significant withdrawals highlight a shift in investor sentiment and demand since late January.
For Ethereum’s price to stage a bullish reversal soon, market sentiment and demand will need to turn more optimistic.
Frequently Asked Questions
FAQs Why Ethereum Fell Below 2000
Q1 What does it mean that Ethereum fell below 2000
A It means the market price of one Ether the cryptocurrency of the Ethereum network dropped and traded under the 2000 USD mark This is a significant psychological and technical price level that many investors watch
Q2 Why did the price drop so suddenly
A Cryptocurrency prices are volatile A sharp drop is rarely due to one single cause but a combination of factors like negative market sentiment large selloffs broader economic news or technical trading patterns triggering automatic sell orders
Q3 Is this drop related to Bitcoins price
A Often yes Bitcoin is the largest cryptocurrency and its price movements frequently influence the entire market including Ethereum If Bitcoin falls sharply it can create a downward pull on other major assets like ETH
Q4 Did something specific happen on the Ethereum network to cause this
A Not necessarily While networkspecific issues can affect price this drop is more likely tied to broader market forces macroeconomic conditions or shifts in investor risk appetite rather than a problem with Ethereums technology itself
Q5 What are broader market forces or macro conditions
A These refer to largescale economic factors that affect all risk assets not just crypto Examples include rising interest rates inflation data geopolitical tensions or stock market downturns When traditional markets get shaky investors often sell riskier assets like cryptocurrencies
Q6 Could this be due to large investors selling
A Possibly If large holders often called whales sell significant amounts of ETH the sudden increase in supply can outpace demand and push the price down Tracking large wallet movements can sometimes provide clues
Q7 Is this a good time to buy Ethereum on the dip
A This is a personal investment decision with risk Some investors see price drops as buying opportunities believing the asset will recover However prices can always fall further Never invest money you cant afford to lose and consider doing your own research
Q8 How does Fear and Greed in the market affect the price