Ethereum (ETH) has experienced a significant increase in on-chain token transfers this week as its price plummeted from approximately $3,000 to around $2,000. This notable rise in transfer activity was reported by the data analyst CryptoOnchain, with total transactions reaching peak levels comparable to August 2025.

The spike in token movements indicates major sell-side pressure, as holders shift to stablecoins and exchanges amidst the ongoing price decline. The divergence between falling prices and heightened network activity is often linked to panic among investors, prompting them to liquidate assets during swift market downturns.

Token Transfers Surged as ETH’s Value Fell

CryptoOnchain reported that Ethereum’s 14-day moving average for total tokens transferred jumped from about 1.6 million on January 29 to around 2.75 million by February 7—the highest figure since August 2025. This increase coincided with ETH’s rapid correction from the $3,000 mark to the low $2,000 range.

The surge in transactions is attributed to investors hastily moving into stablecoins, transferring funds onto exchanges for sales, and many liquidations occurring within decentralized financing protocols as collateral values drop.

“This significant spike in ERC-20 token transfers during a price crash suggests investors are rushing to exit positions, likely converting volatile assets into stablecoins or moving funds to exchanges for liquidation,” the market observer commented.

The timing of this panic aligns with a broader market decline, which has seen Bitcoin’s price decrease from above $80,000 to just under $60,000, before recovering to around $72,000, while Ethereum finds it difficult to maintain crucial support at $2,000.

Panic selling isn’t confined to smaller holders; Ethereum co-founder Vitalik Buterin was reported to have sold more than 6,100 ETH across a few days last week, along with other prominent holders who reduced their positions to settle loans, exacerbating short-term selling pressure.

Exchange Balances Decline Amid High Volatility

Despite the recent flurry of token transfers, numerous indicators show a decrease in ETH availability on exchanges. On-chain analytic tool CoinNiel noted that Ethereum reserves on exchanges have reached levels not seen since mid-2016. Additionally, Binance’s ETH reserves are reported to be around 3.7 million ETH, the lowest since 2024.

This mixed scenario presents challenges; while ETH’s current trading price hovers around $2,040—down about 3% in the last 24 hours and nearly 11% over the past week—diurnal prices briefly fell below $1,900 on February 5, before regaining some lost ground.

Conversely, the falling exchange balances imply fewer coins are available for immediate sale. Persistent transfers might reflect stress-driven repositioning rather than long-term selling. Past spikes in activity during price downturns have often occurred close to local market bottoms when forced selling subsided.

As things stand, Ethereum finds itself caught between ongoing market volatility and diminishing supply on exchanges, with on-chain data indicating fear-driven actions while long-term investors continue to withdraw their assets from trading platforms.