Selling from U.S. investors, including ETFs, cooled after early February. Yet it has not flipped to net buying. Farrell pointed to the negative reading on the Coinbase Premium Index.
Historically, sustained ETH recoveries have aligned with U.S. buying pressure. For now, Farrell said a negative premium may keep ETH below $2,000. As a result, ETH may struggle to reclaim $2,000 for a while.
Analysts also described a flow-based “capitulation” signal tied to deep average losses. They said extreme loss depth often marks the worst part of capitulation. They linked the current loss profile to a 12-month implied return near +81%.
Liquidity has stayed active despite losses. ETH posted $8.56 billion in 24-hour trading volume. That level signals ongoing price discovery and continued capital movement.
The bottom thesis also rests on staking and institutional validation. Over 30% of the ETH supply sits locked in validators. That lockup reduces circulating supply and tightens future availability during selloffs.
Institutional activity adds another demand layer. BlackRock and ARK Invest bought millions of shares in BitMine. Amundi launched tokenized funds on Ethereum, adding on-chain institutional participation that Farrell said earlier downturns lacked.
Also Read: Ethereum Whales Dump Reserves in 2026: Is a Bigger Move Coming?