Ethereum is facing continued selling pressure as broad cryptocurrency market sentiment turns cautious and some sectors spiral into outright panic. Price action has struggled to regain stability in recent weeks, and repeated rebound attempts have failed to generate sustained upward momentum. Increased volatility, tighter liquidity conditions, and ongoing macro uncertainty have heightened the defensive posture of both retail and institutional participants, leaving Ethereum vulnerable to more near-term weaknesses.
A recent CryptoQuant report provides additional context through on-chain activity. Data shows that the ETH Binance user deposit address indicator has recorded a sharp increase. The number of unique addresses depositing Ethereum into Binance surged from around 360,000 to over 450,000, representing the highest level observed since August 2025. Because assets transferred to an exchange are typically more accessible for liquidation, use as collateral, or portfolio rebalancing, metrics that track deposit addresses often serve as a proxy for potential sell-side intent.
However, this surge doesn’t automatically translate into sales right away. In some cases, this reflects positioning adjustments, hedging activities or preparations for derivatives transactions. Nonetheless, the magnitude of the recent increase suggests heightened market jitters and warrants close monitoring as Ethereum navigates an increasingly fragile market environment.
Exchange deposits surge due to deepening price adjustments
The report highlights that these indicator breakouts were accompanied by severe price corrections. Ethereum has fallen sharply from its October high of $4,900 to around the $1,900 region. The simultaneous price decline and spike in exchange deposit addresses presents two key on-chain interpretations that need to be carefully considered.
The first scenario represents retail capitulation. A sharp increase in unique deposit addresses often reflects the panic behavior of small investors. Participants who withstood the initial phase of the decline can now move their assets to exchanges to liquidate positions, intensifying short-term selling pressure.
The second interpretation concerns derivatives market positioning. If ETH trading below the $2,000 threshold, some deposits will likely mean collateral replenishment. Traders facing liquidation risk may add margin to maintain leveraged long positions rather than selling their holdings outright.
In the short term, increased deposits may increase potential supply on exchanges, which could lead to increased volatility if sales are realized. However, historically, sharp spikes in deposit activity have often occurred during the final stage of remediation. These conditions sometimes precede seller exhaustion.
Monitoring exchange outflows, spot volume absorption, and derivatives positioning is important to determine whether this activity represents ongoing downside risk or the early formation of a local market bottom.
Ethereum tests structural support as its downtrend continues.
Ethereum continues to trade under sustained pressure, with the weekly chart showing a clear loss of bullish momentum after being rejected near the $4,800-$5,000 region. The price has now moved back towards the $1,900 area, an area that served as consolidation support during the previous phase of the cycle. The inability to stay above the mid-cycle moving average means that sellers are still maintaining structural control.
The 50-week moving average has rolled over and now acts as indirect resistance, while the 100-week moving average appears to be flattening. Meanwhile, prices are approaching the longer-term 200-week moving average, a level historically associated with key cyclical support. A decisive collapse below this region could lead to a larger downturn, while stabilization in this region could promote medium-term accumulation.
Volume patterns indicate intermittent spikes during declines, which usually reflects distribution rather than sustained buying interest. This reinforces the interpretation of a defensive market phase rather than a confirmed recovery trend.
Despite these weaknesses, volatility compression near long-term averages sometimes occurs prior to transition periods. However, confirmation will require a sustained close above recoverable resistance levels and improvement in engagement indicators. Until then, Ethereum remains in a weak technical position with risks biased toward continued consolidation or a downward trend rather than an immediate bullish continuation.
Featured image from ChatGPT, chart from TradingView.com
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