Key Points:
- Ethereum whales sold $371M and used proceeds to repay Aave loans
- Deleveraging unfolded as markets logged $750M in liquidations
- Aave processed $140M in automated liquidations without issues
- Whale repayments reduce risk of cascading forced liquidations
Ethereum’s latest selloff is accompanied by a quieter but consequential shift beneath the surface: large holders are actively reducing leverage, and decentralized lending infrastructure is being tested in real time.
Between February 1 and 2, two major Ethereum-linked entities sold a combined $371 million worth of ETH and routed much of the proceeds toward repaying loans on Aave, according to on-chain data from Arkham Intelligence and Lookonchain.
The transactions unfolded as broader crypto markets incurred more than $750 million in liquidations over 24 hours, driven by a sharp deterioration in sentiment and renewed macroeconomic uncertainty.
The risk-off move was amplified after former Binance chief executive Changpeng Zhao stated on February 2 that his earlier “2026 Bitcoin supercycle” view should not be treated as certain, citing rising misinformation and geopolitical stress. The Crypto Fear & Greed Index fell to 15, deep in “extreme fear” territory.
Whale Deleveraging Sends Ethereum to Exchanges
One address associated with the entity known as BitcoinOG deposited 121,185 ETH, valued at roughly $292 million at the time, into Binance. From that sum, approximately $92.5 million in stablecoins was withdrawn and used to repay outstanding debt on Aave, according to Lookonchain.
Arkham data shows the same entity continues to hold substantial on-chain reserves, including tens of thousands of BTC and hundreds of thousands of ETH. In January, it had borrowed stablecoins against ETH collateral, suggesting the latest activity represents a defensive reduction of exposure rather than a full exit.
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A second large participant, Hong Kong–based Trend Research, deposited 33,589 ETH, around $79 million, into the Binance exchange and converted most of it into roughly $77.5 million USDT stablecoins. Nearly all of those funds were allocated to Aave to repay more than 98% of the firm’s outstanding loan, thereby sharply reducing its leverage.
Trend Research is known for accumulating Ether using borrowed stablecoins during earlier market cycles, with some purchases dating back to prices near $1,000, according to on-chain records.
Aave’s Automated Liquidations Pass Stress Test
These voluntary repayments coincided with a surge in forced liquidations on Aave. On January 31, the protocol processed more than $140 million in collateral liquidations across multiple networks.
Aave founder Stani Kulechov said the events were handled “fully automated” and “without any issues,” calling them another demonstration of the protocol’s resilience.
The combination of whale-led deleveraging and automated liquidations highlights a market simultaneously experiencing stress and self-correction. While large ETH transfers to exchanges can add short-term selling pressure, reduced leverage lowers the risk of cascading liquidations later.
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