Key Takeaways

What’s happening with ETH liquidity?

Ethereum’s DeFi TVL is dropping and spot liquidity is thinning, signaling short-term risk-off pressure.

Are bulls giving up?

Staking flows and long-term holders are locking ETH, keeping conviction strong and providing a floor under price.

Ethereum’s [ETH] DeFi liquidity is seeing some big shifts.

Over the past week, stablecoins circulating on Ethereum dropped $3.76 billion from a $161 billion peak. That lines up with ETH taking a 9.77% hit over the week, showing classic risk-off behavior.

At the same time, ETH’s TVL slid nearly $10 billion, landing at $85 billion. In short, DeFi liquidity on Ethereum is pulling back sharply.

With ETH’s $4k support hanging by a thread, are investors starting to rotate out?

Ethereum’s liquidity drain amid market caution

Despite the broader risk-off mood, rotation into ETH isn’t showing up.

ETH/BTC price action backs this up. September flipped bearish after the pair topped out at 0.04 in August. Since then, it’s printed back-to-back red weeklies, setting two fresh lower lows, the latest at 0.036.

With that backdrop, Ethereum’s liquidity squeeze looks more like investors moving to safety, leaving ETH’s $4k support exposed to a deeper breakdown. Simply put, FUD is outweighing FOMO, keeping bid side thin. 

The falling TVL only reinforces this setup.

Nearly $10 billion has rotated out of Ethereum’s locked liquidity, dragging TVL back to early August levels. In short, ETH’s on-chai

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Author: Ritika Gupta