Jiang Zhuo'er Expects Bitmain's Liquidation Line to Drop to $1500, Ethereum Shows Strong Intent to Rebound from Oversold Territory

Jiang Zhuo'er, a noted observer in the cryptocurrency space, expects Bitmain's liquidation line to fall to $1,500. This comes as the broader crypto market experiences renewed volatility, with Bitcoin and Ethereum both facing significant price corrections. Ethereum, the second-largest cryptocurrency by market capitalization, is showing signs of stabilizing, despite trading near key support levels. Analysts suggest it may find a floor amid ongoing bearish sentiment and liquidation waves.

The crypto market capitalization currently stands at $2.65 trillion, having rebounded slightly from recent lows but remains under pressure from key resistance levels. Bitcoin, for example, is trading above $78,000 but has struggled to break through critical resistance from February 1. The market is characterized by bearish momentum, with open interest and futures positions indicating ongoing uncertainty. Institutional investors are also pulling back, with Ethereum ETFs witnessing outflows.

Corporate Ethereum holders, including major investment firms, have suffered significant paper losses as the price of ETH drops. BitMine, one of the largest corporate Ethereum holders, is sitting on an unrealized loss of $6.95 billion as of early February 2026. This has led to a cautious tone from many market participants, with some reducing their exposure to limit further losses.

Why Did This Happen?

The recent sell-off in Ethereum and other cryptocurrencies was triggered by a combination of macroeconomic concerns and the unwinding of leveraged positions. Trend Research, a major Ethereum holder, has been aggressively reducing its holdings to avoid liquidation. As of February 5, the firm had sold over 400,000 ETH in a bid to maintain its health factor and reduce risk.

The leveraged position of Trend Research has been closely monitored by the market, as large-scale liquidations could exacerbate price declines. The firm has been using Aave's lending protocol to manage its debt, selling ETH to repay loans and avoid forced liquidation. This type of behavior is not isolated, with many investors adopting similar strategies to stay ahead of market pressures.

How Did Markets React?

Market reactions have been mixed, with Ethereum showing some signs of stabilizing after hitting an intraday low of $1,748. The price has since rebounded to $1,967, but remains well below its 52-week high of $4,950. Technical indicators suggest selling pressure is still dominant.

The broader crypto market is also showing signs of bearish momentum. Bitcoin, for instance, has seen significant outflows from institutional funds, with CoinShares reporting a weekly outflow of $1.696 billion in the past week. The market is currently at a critical juncture, with investors and analysts watching closely for signs of a potential reversal or further decline.

What Are Analysts Watching Next?

Analysts are keeping a close eye on key levels for both Bitcoin and Ethereum. For Bitcoin, the $60,000 level is seen as a critical support, with some suggesting a recovery could signal the end of the current bearish phase. In contrast, Ethereum is being watched at the $1,740 level, with some suggesting a break below could lead to further declines toward $1,500.

Market observers are also monitoring open interest and funding rates, which are currently indicating a bearish trend. Ethereum's funding rates have turned negative again, a sign that short positions are dominating the market. These metrics help traders understand whether the market is leaning bullish or bearish and how much leverage is currently in play.

Investors are also watching for any signs of institutional buying or large inflows into crypto funds. So far, the trend has been one of outflows, with ETFs and investment vehicles reporting net redemptions. This has contributed to the overall bearish sentiment and increased pressure on prices.

The next few weeks will be critical in determining whether the current bearish phase is nearing its end or if further declines are likely. Analysts will be watching for any signs of stabilization, including a shift in market sentiment, a reversal in technical indicators, or a return of institutional buyers to the market.