Ethereum – Smart money ‘buys the dip’ as altcoins enter structural downtrend

Ethereum’s sell-off has triggered an aggressive provide switch, somewhat than uniform capitulation. As its worth retraced from its late-2025 highs, macro stress and altcoin losses pushed weaker holders to de-risk. That defensive promoting accelerated as Ethereum [ETH] approached the $1,900–$2,000 vary, releasing massive volumes of spot liquidity.

Whales stepped in towards that circulate. Because of this, accumulating balances expanded from roughly 8 million ETH to over 24 million ETH, whereas realized capitalization climbed from almost $12 billion to above $70 billion. This absorption helped sluggish draw back momentum at the same time as the value printed decrease lows.

In the meantime, the realized worth for these cohorts initially rose in direction of $2,600, reflecting earlier entries.

Supply: CryptoQuant/ X

Nevertheless, sustained dip shopping for bent that curve downwards as the associated fee foundation averaged decrease. Traders interpreted the divergence as constructive positioning.

Tightening liquid provide and moderating promote strain now body whether or not accumulation can stabilize worth or merely precede deeper volatility.

Altcoin liquidity collapse contrasts Ethereum’s accumulation power

Whereas Ethereum whales absorbed the availability throughout weak point, the broader altcoin market moved in the wrong way.

Over the previous 13 months, cumulative purchase/promote quote quantity for altcoins sank between round -$180 billion and -$210 billion – An indication of relentless internet spot promoting. This imbalance intensified in early 2026, coinciding with a roughly $730 billion wipeout in whole crypto market capitalization.

Supply: X

As liquidity drained from speculative tokens, many alts collapsed by 40–90% from their highs. In the meantime, Bitcoin [BTC] slid by almost 19% in February in direction of the mid-$60,000 vary, reinforcing danger aversion. Futures Open Curiosity fell from $61 billion to $49 billion, accelerating deleveraging throughout thinner alt markets.

Institutional rotations additional pressured high-beta property, whereas retail demand remained muted. Because of this, Bitcoin dominance climbed to 58%, highlighting capital consolidation.

This divergence underscores selective accumulation in majors, whereas altcoins endure structural distribution till broader demand rebuilds.

As capital rotated defensively into majors, the altcoin market’s construction weakened additional. Breadth metrics deteriorated sharply as effectively, with almost 83% of altcoins falling beneath their 50-week transferring common.

This breakdown adopted Bitcoin’s post-$126,000 retracement, which suppressed danger urge for food throughout high-beta property.

As draw back momentum continued, promote strain broadened. By 07 February, greater than 92% of Binance-listed altcoins had been buying and selling underneath this long-term pattern threshold. Such excessive dispersion alluded to pressured exits and thinning spot demand.

Supply: Darkforst/ X

In the meantime, macro headwinds intensified warning. Rising geopolitical tensions and hawkish Federal Reserve alerts lowered speculative positioning. On the identical time, increasing token provide fragmented liquidity additional.

Traders responded by consolidating into perceived security, reinforcing divergence as majors absorbed flows whereas altcoins remained structurally suppressed.

To place it merely, whale absorption pointed to to early-cycle ground formation as the availability tightened and the associated fee foundation compressed. Nevertheless, due to fragile liquidity and macro dangers, deeper draw back stays attainable.

Remaining Abstract

• Aggressive whale absorption and tightening liquid provide hinted on the formation of an early-cycle base, regardless of altcoin markets being structually fragile.

• Capital consolidation into majors appeared to be opposite to relentless altcoin distribution, leaving Ethereum supported however nonetheless uncovered to macro-driven liquidity shocks.