Whale deleveraging drags Ether lower as on-chain data flags Buterin ETH sales

Ether weakness this week has looked less like a slow drift and more like leverage getting forced out of the system.

A market note shared by Scimitar Capital co-founder zlex said two large Ether holders have closed most of their leveraged positions over the past week. He linked that unwind to Ether dropping more than 20% and to spillover pressure that pulled Bitcoin down toward a key support area around the prior cycle all-time-high zone. 

Zlex tied the sharpest leg of the move to derivatives. He said a roughly 200,000 ETH perpetual long held by a trader known as Garrett was liquidated over the weekend. The liquidation pushed Ether close to the trigger price for Trend Research, which has maintained a leveraged position through Aave.

According to zlex, Trend Research has repaid hundreds of millions of dollars in borrowings since then. That repayment lowered its estimated liquidation level to around $1,600, which he said was roughly 24% below the current Ether price at the time of his post. He also said Garrett sold about $300 million of spot ETH on top of the liquidation-driven selling.

The takeaway is not only that positions blew up, but that the market is shedding leverage. Repayments and position closures can reduce the odds of another near-term liquidation cascade, even though they add pressure while the unwind is happening. Zlex said a rebound in Ether would likely end the current feedback loop and argued that technical support made the current zone a plausible bottom for Ether and the broader crypto market.

On-chain tracking added another supply point. Lookonchain said Ethereum co-founder Vitalik Buterin sold 2,961.5 ETH, worth about $6.6 million, over the past three days at an average price near $2,228, and said the selling was still ongoing. 

For traders, the next checkpoints are brutal: whether spot bids show up fast enough, whether big borrowers keep dumping risk, and whether another liquidation wave hits before the market can breathe. If buyers stay thin while whales unwind and large wallets keep selling, a routine drawdown can turn into a deeper cascade and $1,600 becomes less a distant liquidation marker and more a line everyone is suddenly watching in real time.