Ethereum continues to trade below the critical $2,000 level, reflecting persistent market pressure as traders await a clearer directional catalyst. The inability to reclaim this psychological threshold has kept sentiment cautious, with volatility elevated and liquidity conditions still uncertain. While price action has stabilized somewhat after recent declines, the broader structure suggests the market is preparing for a decisive move that could define Ethereum’s short-term trajectory.
A recent CryptoQuant report provides important context, indicating that the Ethereum market has undergone one of its most prolonged periods of stress since mid-2021. According to the data, the 7-day simple moving average of long liquidations on Binance climbed to roughly 9,000 ETH on February 6, 2026. Because this figure represents a smoothed weekly average rather than a single-day spike, it signals sustained pressure rather than a brief liquidation cascade.
This pattern implies that leveraged long positions have been unwound gradually over several days. Pointing to persistent deleveraging rather than a sudden capitulation event. Historically, extended liquidation phases can reset market leverage and reduce speculative excess, though they also tend to coincide with fragile sentiment. Whether this process ultimately stabilizes Ethereum or leads to further downside remains dependent on liquidity conditions and broader market demand.
Sustained Liquidations Signal Derivatives Market Reset
The CryptoQuant report further notes that Ethereum’s decline from the $3,000 region to the $2,000 range did not trigger any capitulation events. Instead, the market experienced a prolonged sequence of margin calls, with leveraged long positions gradually unwound over several consecutive days. This pattern reflects persistent stress in the derivatives market rather than a short-lived liquidation cascade. Indicating that traders faced sustained pressure as the price trended lower.
From a historical standpoint, the intensity and duration of this liquidation phase appear to exceed those recorded during major capitulation periods of the 2022 bear market. Such extended liquidation activity typically signals a broad deleveraging cycle, where excessive speculative positioning is systematically cleared. This process often reshapes market structure by reducing leverage-driven volatility and restoring a more balanced risk environment.
The implication is that Ethereum may have already undergone a significant leverage reset in recent weeks. Persistently elevated liquidation averages can sometimes precede seller exhaustion. Weaker market participants exit positions, and forced selling pressure gradually subsides.
The durability of any recovery will likely depend on renewed spot demand and macro liquidity conditions. Also, investor confidence must return following this extended period of derivatives-driven stress.
Ethereum Tests Long-Term Support: Weekly Structure Weakens
Ethereum’s weekly chart shows increasing structural pressure after the loss of the $2,000 level, a threshold that previously acted as both psychological support and a key technical pivot. The recent breakdown places ETH below major trend-defining moving averages, suggesting weakening bullish momentum and a shift toward a more defensive market environment.
Price action reflects a clear rejection from the $3,000 region earlier in the cycle. Followed by a sequence of lower highs that typically characterizes transitional or corrective phases. The latest decline also coincides with rising trading volume, often associated with distribution or leveraged position unwinding rather than organic accumulation. This dynamic reinforces the perception of ongoing market stress rather than stabilization.
From a structural standpoint, the next meaningful support area appears around the mid-$1,500 to $1,700 zone, where previous consolidation and demand emerged in earlier phases. Holding above this range would help preserve the broader long-term bullish framework, even amid current weakness. A sustained break below it, however, could shift sentiment toward a deeper corrective cycle.
Ethereum remains sensitive to macro liquidity conditions, derivatives positioning, and overall crypto market sentiment, with recovery dependent on renewed spot demand and stabilization above key technical levels.
Featured image from ChatGPT, chart from TradingView.comÂ
