Ethereum – Why derivatives data is hinting at potential shift after February’s capitulation

Before its recent recovery, February saw Ethereum [ETH] go into correction mode, gripped by forced selling. The altcoin’s price dropped below $2,000, marking a sharp drawdown of over 50% from cycle highs.

Realized volatility surged to 0.97 on a 30-day basis, the highest since March 2025 – Signaling intense repricing and wider daily ranges. This volatility spike reflected a fierce battle between buyers and sellers, with positions reallocating amid consolidation in mid-range support.

At the time of writing, Ethereum derivatives flows were approaching a critical transition as the Binance Taker Buy/Sell Ratio gradually returned towards equilibrium near 1.0. This shift seemed to be coming on the back of months of persistent sell-side dominance in Futures markets.

Initially, during the advance towards the $4,500-zone, the ratio stayed consistently below equilibrium. The monthly average slipped near 0.95, while the weekly reading declined further towards 0.92.

As Ethereum later retraced towards the $2,050-region, the previous imbalance translated into broader market capitulation. And yet, recently, the ratio recovered towards 0.99 on the charts.

Meanwhile, repeated spikes above 1.12 highlighted bursts of aggressive market buying despite the corrective environment. If the ratio is sustained above 1.0, buyer dominance could drive recovery. Otherwise, renewed selling pressure may extend consolidation near press time levels.

Capitulation selling peaks as Ethereum tests early stabilization signals

Following the earlier derivatives stabilization signals, Ethereum’s net taker activity revealed the capitulation phase that preceded the current inflection. The price initially climbed towards $3,300 as brief green bars appeared in mid-January.

Soon after, momentum weakened as aggressive market selling returned. Soon after, red bars expanded below zero while net taker volume steadily deepened.

By early February, the Net Taker Volume had plunged close to -240 million, marking the most extreme negative reading since November. At the same time, Ethereum’s price dropped sharply towards the $1,850-zone.

This imbalance could be evidence of panic selling, cascading liquidations, and heavy short positioning across Futures markets. Yet historically, such extremes often signal seller exhaustion before stabilization.

If red bars begin to contract and buyers reappear, accumulation could support recovery. However, sustained negative flows would indicate that bearish dominance remains intact.

Post-crash recovery tests key resistance near $2.1k

At press time, Ethereum was trading near $2,030–$2,035 after a sharp February decline that dragged the price from above $3,000 towards the $1,800–$1,900 demand zone. Initially, bearish momentum dominated as consecutive lower highs compressed the structure.

Soon after, buyers emerged near $1,800, forming higher lows and triggering a rebound. The price then reclaimed the psychological $2,000-level, fueling short liquidations and volatility expansion.

Meanwhile, the RSI near 61 signaled strengthening momentum without overbought pressure. The support was stabilizing at around $2,000–$2,035, while the resistance stood near $2,100 and $2,200.

If buyers defend press time levels, recovery could extend upwards. However, weakening demand may reopen downside risk towards $1,900.

Final Summary

• Ethereum’s [ETH] derivatives metrics hinted at capitulation pressure easing as the Taker Ratio approached equilibrium.
• ETH’s recovery above $2,000 keeps bullish momentum viable towards $2,100–$2,200, while sustained selling could reopen downside risk.