Ethereum continues to trade below the important $2,000 level, reflecting sustained market pressure as traders await a clearer directional catalyst. Unable to regain this psychological threshold, sentiment remains cautious, volatility has increased and the liquidity situation remains uncertain. While the price trend has stabilized to some extent after the recent selloff, the broader structure suggests the market is bracing for a decisive move that could determine Ethereum’s near-term trajectory.
Related books
A recent CryptoQuant report provides important context showing that the Ethereum market is experiencing one of the most prolonged periods of stress since mid-2021. According to the data, the 7-day simple moving average of long-term clearing on Binance rose to around 9,000 ETH on February 6, 2026. This number represents a smoothed weekly average rather than a single-day spike, and thus indicates sustained pressure rather than a short-term liquidation cascade.
This pattern means that long leveraged positions are being gradually unwound over several days. It refers to sustained deleveraging rather than a sudden capitulation event. Historically, extended liquidation phases can reset market leverage and reduce speculative excess, but at the same time they tend to cause fragile sentiment. Whether this process ultimately stabilizes Ethereum or leads to further declines will depend on the liquidity situation and broader market demand.
Persistent Clearing Signal Derivatives Market Reset
The CryptoQuant report further points out that Ethereum’s fall from the $3,000s to the $2,000s did not trigger a capitulation event. Instead, the market experienced a series of prolonged margin calls that gradually unwound long leveraged positions over several consecutive days. This pattern reflects sustained stress in derivatives markets rather than a short-term liquidation cascade. This indicates that traders are facing continued pressure as prices trend downward.
From a historical perspective, the intensity and duration of this liquidation phase appears to exceed that recorded during the massive capitulation period of the 2022 bear market. Such prolonged liquidation activity typically signals a broader deleveraging cycle, in which excessive speculative positioning is systematically unwound. This process often reshapes market structures by reducing leverage-induced volatility and restoring a more balanced risk environment.
This means that Ethereum may have already undergone a significant leverage reset in recent weeks. If the clearing average continues to rise, it may rise before sellers are exhausted. Weak market participants exit their positions and the forced selling pressure gradually weakens.
Whether the recovery is sustained is likely to depend on new spot demand and macro liquidity conditions. Additionally, investor confidence needs to be restored after a long period of derivative stress.
Related books
Ethereum tests long-term support: weekly regime weakens
Ethereum’s weekly chart shows increasing structural pressure after losing the $2,000 level, a threshold that previously served as both psychological support and a key technical pivot. The recent breakdown shows that ETH has fallen below the main trend-setting moving averages, indicating a weakening of the bullish momentum and a shift towards a more defensive market environment.
Price action reflects a clear rejection from the $3,000 area earlier in the cycle. This is followed by a series of lower highs that typically characterize a transition or correction period. Recent declines have coincided with increases in trading volumes and are often associated with distributions or leveraged position unwinding rather than organic accumulation. This move reinforces the perception of continued stress rather than stabilizing the market.
Related books
From a structural perspective, the next key support area appears to be around the mid-$1,500 to $1,700 zone, where demand appeared during previous consolidations and early stages. A move above this range would help sustain the long-term bullish framework amidst the current weakness. However, if conditions remain below that, sentiment could head toward a deeper correction cycle.
Ethereum remains sensitive to macro liquidity conditions, derivatives positioning, and overall cryptocurrency market sentiment, and any recovery will depend on new spot demand and stabilization above key technical levels.
Featured image from ChatGPT, chart from TradingView.com
