Tom Lee's Bitmine may be buying ETH, but Vitalik Buterin and everyone else appears to be selling

Core Viewpoint - Ether (ETH) has experienced significant price declines, currently trading around $1,950, down 60% since August and 42% since January 14, largely due to market sell pressure and underperformance compared to other cryptocurrencies [1][2]. Group 1: Market Dynamics - The current downturn is attributed to a broader crypto bear market, with ETH underperforming compared to larger cryptocurrencies like Bitcoin (BTC), XRP, and Cardano (ADA), which have seen declines closer to 35% since mid-January [2]. - A notable factor in ETH's decline has been large sales from Ethereum founder Vitalik Buterin and derivatives traders, contributing to increased sell pressure [2][5]. - Onchain analysts report that a specific entity has sold approximately 47,000 ETH (valued at $120 million) over four days, including 31,700 ETH in a single five-hour period, to repay loans on Aave [3]. Group 2: Collateral and Liquidation Risks - The wallets involved in the recent sales still hold nearly 50,000 ETH as collateral on Aave, with about $86 million in USDC borrowed against it, putting their position close to liquidation as ETH prices fall [3]. - This situation creates a feedback loop where price drops lead to weakened collateral, necessitating debt repayment, which in turn results in more ETH being sold [4]. Group 3: Institutional Sentiment and Trading Strategies - ETH's steep decline is partly due to its status as the primary asset for leverage in the crypto market, leading to it being sold first when traders unwind positions [5]. - Institutional investors currently show a preference for Bitcoin over Ethereum, as noted by former White House communications director Anthony Scaramucci, who suggests that while institutions may eventually diversify into Ethereum, Bitcoin remains the favored asset at this time [6]. - There is a segment of the market engaging in delta-neutral trades, which involves buying spot ETH and lending it while shorting the asset on futures, potentially increasing sell pressure if funding rates shift [6].