Ethereum’s sell-off has triggered an aggressive supply transfer, rather than uniform capitulation. As its price retraced from its late-2025 highs, macro stress and altcoin losses pushed weaker holders to de-risk. That defensive selling accelerated as Ethereum [ETH] approached the $1,900–$2,000 range, releasing large volumes of spot liquidity.
Whales stepped in against that flow. As a result, accumulating balances expanded from roughly 8 million ETH to over 24 million ETH, while realized capitalization climbed from nearly $12 billion to above $70 billion. This absorption helped slow downside momentum even as the price printed lower lows.
Meanwhile, the realized price for these cohorts initially rose towards $2,600, reflecting earlier entries.
Source: CryptoQuant/ X
However, sustained dip buying bent that curve downwards as the cost basis averaged lower. Investors interpreted the divergence as constructive positioning.
Tightening liquid supply and moderating sell pressure now frame whether accumulation can stabilize price or merely precede deeper volatility.
Altcoin liquidity collapse contrasts Ethereum’s accumulation strength
While Ethereum whales absorbed the supply during weakness, the broader altcoin market moved in the opposite direction.
Over the past 13 months, cumulative buy/sell quote volume for altcoins sank between around -$180 billion and -$210 billion – A sign of relentless net spot selling. This imbalance intensified in early 2026, coinciding with a roughly $730 billion wipeout in total crypto market capitalization.
Source: X
As liquidity drained from speculative tokens, many alts collapsed by 40–90% from their highs. Meanwhile, Bitcoin [BTC] slid by nearly 19% in February towards the mid-$60,000 range, reinforcing risk aversion. Futures Open Interest fell from $61 billion to $49 billion, accelerating deleveraging across thinner alt markets.
Institutional rotations further pressured high-beta assets, while retail demand remained muted. As a result, Bitcoin dominance climbed to 58%, highlighting capital consolidation.
This divergence underscores selective accumulation in majors, while altcoins endure structural distribution until broader demand rebuilds.
As capital rotated defensively into majors, the altcoin market’s structure weakened further. Breadth metrics deteriorated sharply as well, with nearly 83% of altcoins falling below their 50-week moving average.
This breakdown followed Bitcoin’s post-$126,000 retracement, which suppressed risk appetite across high-beta assets.
As downside momentum persisted, sell pressure broadened. By 07 February, more than 92% of Binance-listed altcoins were trading under this long-term trend threshold. Such extreme dispersion alluded to forced exits and thinning spot demand.
Source: Darkforst/ X
Meanwhile, macro headwinds intensified caution. Rising geopolitical tensions and hawkish Federal Reserve signals reduced speculative positioning. At the same time, expanding token supply fragmented liquidity further.
Investors responded by consolidating into perceived safety, reinforcing divergence as majors absorbed flows while altcoins remained structurally suppressed.
To put it simply, whale absorption pointed to to early-cycle floor formation as the supply tightened and the cost basis compressed. However, thanks to fragile liquidity and macro risks, deeper downside remains possible.
Final Summary
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Aggressive whale absorption and tightening liquid supply hinted at the formation of an early-cycle base, despite altcoin markets being structually fragile.
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Capital consolidation into majors seemed to be contrary to relentless altcoin distribution, leaving Ethereum supported but still exposed to macro-driven liquidity shocks.