What happened to Ethereum? Co-founder wallet activity shocks the market

Recently, Ethereum has continued to weaken. The price once fell to around $1,500, setting a new low since April 2025, as market pessimism has spread across the board.

At the same time, Bitcoin has also pulled back to around $60,000. With the overall market under pressure, this round of sharp selloff is the result of multiple factors combining together, including institutional capital retreat, large on-chain transfers, and derivatives capital fleeing.

The continuous withdrawal of institutional funds is the core catalyst behind Ethereum’s weakness. Data shows that Ethereum spot ETFs have recorded net outflows for four consecutive weeks, with cumulative outflows exceeding $870 million, and there have even been instances of 17 straight days of uninterrupted outflows.

Currently, the total size of Ethereum ETFs has shrunk from a historical peak of $30 billion to $8.7 billion, a decline of more than 70%. As a major channel through which Wall Street positions itself in Ethereum, ETFs are steadily bleeding capital, directly reflecting that traditional financial institutions are reducing their risk exposure to crypto assets.

On-chain large-scale anomalies further intensify market panic. After lying dormant for three years, a wallet associated with an Ethereum co-founder suddenly became active, transferring out a total of 120,000 ETH in batches, worth more than $180 million. The market is worried that key related holdings are being concentrated and sold off.

Meanwhile, mainstream exchanges are receiving large deposits of ETH. The daily inflow reached 2.24 million ETH, the highest level in four months. As ETH balances within exchanges rise quickly, it implies that potential sell pressure in the market is continuing to increase.

The derivatives market is also sluggish. The industry is seeing large-scale deleveraging: Ethereum contract open interest has shrunk by 13%. Speculative leverage funds are exiting in large volumes, and the market has lost the momentum needed for a rebound.

The options market is even more broadly tilted to the downside. Put option premiums far exceed call option premiums. At key price levels such as $1,500, $1,400, and $1,000, large hedging positions have clustered there. In the near term, implied volatility has surged sharply, and $1,500 has also become an important defense level in the current upside-vs-downside standoff.

Market “big players” are also showing clear divergence in their stance. Some whales are transferring ETH to exchanges to take a defensive approach and exit, further amplifying short-term selling pressure.

But there are also long-term holders who had cashed out at higher levels earlier, and they have started to buy back ETH in batches at low prices. The split between bulls and bears has widened; however, overall buying power remains thin.

Even though some long-term capital has begun to position at lower levels, it is still difficult to reverse the short-term weak trend for now. For Ethereum to stabilize later, the key is whether ETF funds can flow back in and whether the pace of ETH inflows into exchanges can slow down.

Until clear signals of recovery appear, Ethereum is likely to maintain a weak, range-bound movement.

Of course, beyond the capital-exit pressure on the funding side, the broader Ethereum narrative is also facing tests at the moment. It remains to be seen whether the narrative is what dragged down the price, or whether the price is what is affecting the narrative—perhaps there is still no definitive answer for now.

After all, the entire industry is currently caught in self-doubt. Except for BTC, which can hold on a little longer, everything else has become the target of criticism—everyone is denouncing it.

Interestingly, today’s market sentiment and the “drawn lines” look extremely similar to early summer 2022.

So, just how similar will things be going forward, and how will the market react? Perhaps we will only know something after we get through this summer—though back then, there wasn’t a grand narrative like AI is attracting attention now. And now it’s one being a new love, the other an old love—but who isn’t just another “little sweetheart”?