Ethereum Under Pressure: Buterin's Sales and ETF Outflows Drive ETH Toward $2,000 as DeFi TVL Dips Below $100 Billion
Ethereum (ETH) extended its decline on Tuesday, breaching key support levels as a confluence of selling pressure pushed the world's second-largest cryptocurrency perilously close to the $2,000 mark.
The bearish momentum was underscored by on-chain data revealing that Ethereum co-founder Vitalik Buterin has been a notable seller. According to blockchain analytics firm Lookonchain, an address linked to Buterin sold 2,961.5 ETH over a three-day period, netting approximately $6.6 million at an average price of $2,228 per token. The sales coincided with ETH's slide from the $2,300 range.
"When a foundational figure like Buterin sells, it's never viewed in isolation," said Marcus Chen, a portfolio manager at digital asset fund Argo Capital. "It feeds into the prevailing narrative of uncertainty, especially with the regulatory overhang for Ethereum-based products."
That uncertainty is reflected in the flows for the recently launched U.S. spot Ethereum ETFs. Data from Farside Investors shows the products have struggled to gain traction since their debut. On February 4 alone, they recorded a net outflow of $79.4 million, with BlackRock's iShares Ethereum Trust (ETHA) accounting for $58.9 million of that total. The segment has seen consistent outflows since late January, failing to replicate the initial success of Bitcoin ETFs.
The pressure isn't universal. Blockchain data indicates some large-scale investors, or 'whales,' have used the dip to accumulate ETH. Major centralized exchanges recorded a net outflow of 143,640 ETH (worth roughly $335 million) in 24 hours, a signal often interpreted as movement into cold storage for long-term holding.
However, the prevailing sentiment has spilled over into the decentralized finance (DeFi) ecosystem. The total value locked (TVL) across all DeFi protocols fell 3.4% in 24 hours to $99.8 billion, dipping below the psychologically significant $100 billion level for the first time since May 2025, according to DeFiLlama. Leading protocols like Aave and Lido Finance saw their TVL drop by 4.5% and 7%, respectively.
"The DeFi contraction is a direct function of asset price depreciation and likely some deleveraging," explained Dr. Anya Petrova, a research fellow at the Cambridge Centre for Alternative Finance. "When ETH price falls sharply, it affects collateral values across lending platforms and can trigger a negative feedback loop."
The downturn has proven lucrative for traders positioned for further losses. One whale on the Hyperliquid derivatives platform, identified as 'super short 0x20c2,' reportedly realized a profit of $102.7 million from a short position on ETH. Another entity gained $55.5 million by shorting a basket of cryptocurrencies including Bitcoin, Ethereum, and Solana.
At the time of writing, ETH is trading around $2,100, down 29% over the past seven days. Despite the sell-off, market activity remains high, with 24-hour trading volume rising 11% to $51 billion.
Community Reaction
David K. (Crypto Analyst): "This is a healthy correction and a test of lower support. Buterin's sales are planned and documented, not panic selling. The real story is the weak ETF flows—the market expected more institutional demand."
Sarah Li (DeFi Developer): "Seeing TVL drop hurts, but it's a stress test for the ecosystem. Protocols with strong fundamentals and sustainable yields will survive. It separates the robust from the fragile."
"CryptoCassandra" (Twitter Commentator): "Are you kidding me? The founder is dumping and the 'institutional wall of money' from ETFs is a total dud. This is what happens when the narrative collapses. Retail is left holding the bag again while the whales short it to oblivion."
Professor Raymond Holt (Economics Academic): "This volatility underscores the asset's sensitivity to influencer actions and speculative flows. The decoupling between high trading volume and price suggests a battle between entrenched buyers and sellers, with macro factors still in the driver's seat."