Ethereum fell below the key $1,980 level on February 21, 2026, as macro pressure and leverage unwinds accelerated its decline. This pushed all major whale cohorts into unrealized losses, with spot prices trading below the $2,075 cost basis of the largest holders. Despite the widespread pain, on-chain data suggests whales are largely holding rather than selling, indicating a period of strategic absorption and conviction testing.
Ethereum’s decline unfolded progressively as macro pressure, leverage unwinds, and thinning liquidity weighed on its price structure. The breakdown below $1,980 compressed profitability across all major holder groups simultaneously.
As prices weakened, unrealized losses spread across all whale cohorts, from those holding 1,000–10,000 ETH to wallets with over 100,000 ETH. Spot now trades below the $2,075 mega-holder cost basis, confirming losses even among the largest addresses.
Long-term holders hover near breakeven, while short-term cohorts remain deeply underwater. On-chain positioning shows restrained sell behavior, with realized cap trends indicating whales are largely holding.
Founder-linked wallet activity returned to distribution flows, with Vitalik Buterin conducting a staggered disposal pattern. The latest withdrawal involved 3,500 ETH, worth approximately $6.95 million, from Aave.
This pacing differs from distress selling and suggests treasury rebalancing. The activity aligns with rising unrealized losses but reflects cautious loss management rather than a panic exit.
Downside expectations sharpened on Kalshi markets as Ethereum traded near $1,975. Market odds now price an 85% probability of breaching $1,750, while 49% anticipate a decline below $1,250.
This pricing shift aligns with renewed founder-linked sales and ongoing whale liquidity adjustments. Historically, such fear-weighted probabilities have clustered near capitulation zones, where distressed distribution often precedes broader recovery stabilization.
