ETHUSD Today: February 1 Long Wipeouts Knock Ether to Multi-Month Lows

The ethereum price slid to multi-month lows on February 1 as forced long closures hit crypto futures. The pair ETHUSD led losses after crowded bullish bets met thin weekend liquidity and risk-off sentiment. Liquidations topped billions across major tokens, resetting leverage but keeping near-term downside risks alive. We break down what changed, how funding and open interest reset, and what Canadian investors can do now. All prices are in USD unless noted. Consider CAD effects when measuring returns.

What Drove Today’s Slide

Leverage was built up in bullish positions across majors. When prices slipped, cascading liquidations hit order books that were thinner over the weekend. That drove larger price gaps and deeper wicks. Reports show market-wide liquidations exceeded $2 billion during prior crashes, a useful scale hint this flush was not small source.

Crypto traded in a risk-off backdrop. Equities softened earlier in the week and bond yields stayed firm, keeping buyers cautious. That caution reduced dip demand when long positions started to unwind. With fewer bids, the ethereum price fell faster, and the sell momentum fed on itself until forced flows cooled. This pattern matches prior weekends where $1.7 billion got wiped source.

Leverage Reset: Funding and Open Interest

A classic post-liquidation reset followed. Perpetual funding usually cools or turns negative, and open interest shrinks as positions close. This reduces forced buyers and sellers, which helps price discovery. The effect was broad across majors, with weekend liquidations hitting ETH and peers hard source.

While a leverage reset removes immediate squeeze risk, it does not guarantee a rebound. If spot demand stays weak, prices can grind lower even with lighter derivatives pressure. The ethereum price often bases only after funding steadies near flat and spot volumes rebuild. Until those signals improve, rallies can fade into resistance.

Price Action, Correlations, and Peers

Correlation to bitcoin remains high. When BTCUSD loses key support, capital rotates to cash, not into ETH, which adds pressure. That spillover matters on weekends when liquidity is thin. The ethereum price tends to overshoot during such periods, then retrace part of the move once derivatives calm and spot buyers step back in.

Selling was not isolated. Solana and other large-cap altcoins echoed the move, with several tokens sliding 6 to 7 percent during the weekend reset source. This broad weakness signals a market-wide de-risking phase. In these phases, strength often returns first to bitcoin, with ETH and higher beta names stabilizing later.

Playbook for Canadian Investors

Keep size modest and focus on timeframe. If you trade, consider partial entries and tight risk controls. If you invest, scale in across days to reduce timing risk. Avoid adding leverage until funding and open interest stabilize, and the ethereum price shows higher lows on rising spot volume.

Canadians can use TSX-listed crypto ETFs for simpler access, or U.S. spot markets if comfortable with FX. Remember USD/CAD moves affect returns. If the loonie weakens, USD gains can offset some crypto declines. Consider CAD hedged products where available, or manage FX separately to keep your crypto view clean.

Final Thoughts

A wave of forced selling pushed the ethereum price to multi-month lows as crowded longs met thin liquidity and risk-off sentiment. The leverage reset helps by reducing unstable positions, yet it does not guarantee a quick rebound. We want to see funding near flat, open interest stabilizing, and spot-led buying before adding risk. In practice, that means smaller positions, staggered entries, and clear invalidation levels. For Canadian investors, consider CAD vehicles or hedges to manage currency effects. Keep watch on cross-asset cues from bitcoin, weekend liquidity, and any shifts in macro tone. Patience and discipline matter most after a wipeout.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.