Ethereum Faces Prolonged Liquidation Pressure: What's Next for the Crypto Giant?
Ethereum has recently navigated one of its most extended periods of market stress and liquidation since mid-2021, with its price struggling to reclaim the crucial $2,000 threshold. This prolonged pressure, detailed in a recent CryptoQuant report, signifies a deeper deleveraging in the derivatives market, raising questions about the asset's short-term trajectory and the broader market's resilience.
Decoding the Derivatives Market Shake-Up
The CryptoQuant analysis highlights a significant and sustained unwinding of leveraged long positions, rather than an abrupt capitulation event. Data shows that the 7-day simple moving average of long liquidations on Binance reached approximately 9,000 ETH on February 6, 2026. This smoothed weekly average points to persistent selling pressure over several days, surpassing the intensity and duration of liquidation phases observed even during the 2022 bear market. Such extended deleveraging typically works to reset market leverage and reduce speculative excess, ultimately aiming to foster a more balanced risk environment as weaker market participants exit their positions.
Navigating Critical Support and Future Prospects
On the technical front, Ethereum's weekly chart indicates mounting structural pressure following its fall below the psychological and technical $2,000 level. This breakdown positions ETH beneath key trend-defining moving averages, suggesting a weakening of bullish momentum and a shift towards a more defensive market stance. The price action reflects a clear rejection from the $3,000 region, marked by a sequence of lower highs and a rising trading volume that signals distribution rather than accumulation. The immediate focus turns to the mid-$1,500 to $1,700 zone, which represents the next significant structural support. Maintaining price stability above this range will be crucial for preserving Ethereum's long-term bullish framework, while a sustained breach could lead to a more profound corrective cycle. The asset's recovery remains intricately linked to a resurgence in spot demand, improved macro liquidity conditions, and a restoration of overall investor confidence in the crypto market.
