Monday finds Ethereum caught between significant technical progress and skittish investor sentiment. The asset’s price is hovering perilously close to the psychologically important $2,000 level. In a notable strategic reversal, ENS Labs has scrapped its Layer-2 plans to focus entirely on the Ethereum mainnet. The critical question for traders is whether this fundamental vote of confidence can counteract the prevailing bearish pressure.
Exchange Reserves Hit Multi-Year Low
Beneath the surface of the price struggle, on-chain metrics point to a growing supply squeeze. The amount of Ethereum held on centralized exchanges has dwindled to approximately 16 million ETH. This figure represents a low not seen since the middle of 2016. This declining liquid supply coincides with continued institutional accumulation. Entities like Bitmine Immersion Technology have reportedly used recent price weakness to add to their holdings, despite carrying unrealized book losses. Major banks are maintaining bullish long-term outlooks, with Standard Chartered reiterating a price target as high as $7,500 by the end of 2026.
A Strategic Network Pivot
The surprising move by ENS Labs to halt development of its “Namechain” Layer-2 solution is being viewed as a direct endorsement of the network’s recent “Fusaka” upgrades. Reports indicate these upgrades have slashed transaction costs for registrations by more than 99%. Co-founder Nick Johnson explained the decision, stating that Ethereum is scaling faster than anticipated, making separate infrastructure unnecessary. Ethereum pioneer Vitalik Buterin also weighed in, suggesting that many current Layer-2 designs could become obsolete as the base layer achieves sufficient capability. This demonstrates underlying network strength that has yet to be reflected in the current price action.
Should investors sell immediately? Or is it worth buying Ethereum?
Selling Pressure and Notable Outflows
Despite these positive technological developments, short-term market skepticism remains dominant. The price dipped in early Monday trading, changing hands around $2,033—only modestly above the crucial $2,000 support zone.
Contributing to the negative sentiment are transactions from a wallet associated with Vitalik Buterin. Market observers recorded a withdrawal of over 16,000 ETH from this address, with roughly 3,000 ETH sold directly. Such movements by prominent figures often trigger market unease. Technical analysts are warning that a failure for the $2,000 support level to hold could precipitate a further decline toward the $1,760 area.
All eyes are now on Tuesday, February 10th. A scheduled meeting at the White House concerning the “CLARITY Act” is expected to provide critical signals regarding Stablecoin regulation, which could determine the market’s short-term trajectory.
Ad
Ethereum Stock: Buy or Sell?! New Ethereum Analysis from February 9 delivers the answer:
The latest Ethereum figures speak for themselves: Urgent action needed for Ethereum investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 9.
Ethereum: Buy or sell? Read more here...
