Ethereum underwater supply hits post‑FTX capitulation levels

Ethereum’s on‑chain “supply‑in‑loss” metric climbed back to the range seen after the November 2022 FTX‑related capitulation, while the token trades near $2,350 USD — a level that follows a 6% weekly gain but remains far below its all‑time high [2].

On‑chain stress gauge

Glassnode’s supply‑in‑loss chart tracks the amount of ETH held below its on‑chain cost basis. A rise indicates that more coins sit at an unrealized loss, a condition that often follows steep market corrections. The current reading matches the “pain zone” that followed the FTX collapse in November 2022, a period marked by forced selling and a deep market bottom [1][3]. While a high underwater supply does not guarantee an immediate bounce, it can signal that many speculative holders have already been flushed out, potentially limiting further panic‑driven selling.

Price context and next steps

Despite record on‑chain activity—over 200 million base‑layer transactions in Q1 2026 and an 82% quarter‑over‑quarter rise in new users—ETH’s price remains subdued, hovering around $2,350, a level that reflects a 32% drop in Q1, the third‑worst first quarter since 2016 [2]. The token’s recent 6% weekly gain shows short‑term resilience, but analysts stress that price confirmation is needed before the underwater‑supply signal can be viewed as a durable bottom. A break above recent support levels would be required to shift sentiment from stress gauge to accumulation signal.

What to watch

• Price break of $2,500 – a key resistance that, if cleared, could validate a bottoming process.
• Supply‑in‑loss metric – continued decline would suggest further seller exhaustion; a rise could reignite downside pressure.
• Ethereum ETF flows – weekly inflows of $187 million (week ending April 10) indicate cautious institutional interest; a shift to sustained outflows would add bearish pressure [2].

The convergence of a historically high underwater supply and modest price recovery leaves the market at a crossroads: either the lingering pain translates into a base for renewed buying, or further downside could deepen the drawdown. Traders will be watching price action and on‑chain metrics closely to see which path unfolds.