Panic Selling Meets Thin Liquidity
Ethereum capitulated early Friday, crashing through the psychological $2,000 fortress to trade as low as $1,913. The catalyst? A precise, high-volume exit from the protocol’s co-founder, Vitalik Buterin, whose wallets offloaded approximately 2,961 ETH ($6.6 million) in a 72-hour window.
Market data confirms the sell-off triggered a cascade of liquidations totaling over $210 million in long positions. While Buterin’s sales executed at an average price of $2,228 via CoW Protocol to minimize slippage, the optical damage was immediate. Traders front-ran the “founder capitulation” narrative, driving the asset to its lowest valuation since May 2025.
The Receipt: 16,384 ETH War Chest
On-chain forensics by Arkham Intelligence and Lookonchain reveal the sales are part of a larger structural shift. The 2,961 ETH moved is a fraction of a 16,384 ETH tranche Buterin recently flagged for “public goods funding” and research.
The allocation would fund open-source development, secure infrastructure, and public-goods research… market participants largely interpret the sales as operational funding aligned with stated goals.
Despite the philanthropic tag, funds were routed to the Kanro charity for biotech research, the timing forced the market to digest supply into an order book already thinned by institutional anxiety. Volume on major exchanges vanished as the price sliced through the 200-week Exponential Moving Average (EMA).
Institutional Collateral Damage
The downturn has exposed massive paper losses for institutional holders. BitMine, a major crypto treasury, reportedly faces over $7 billion in unrealized losses, raising fears of forced spot selling if creditors demand liquidity. With the $2,000 floor disintegrated, technical analysts point to $1,650 as the next defensible support level. Bulls are nowhere to be found.
