Analysis of the impact of Yi Lihua's sale of 160,000 ETH in 3 days on the ETH market
Execution Summary
Trend Research, owned by Yi Lihua, did indeed sell off a large amount of ETH recently , totaling 73,588 ETH (worth approximately $169 million) in three days, primarily to repay leveraged debt to Aave. This sell-off occurred against the backdrop of a sharp drop in ETH prices, reflecting a passive response strategy employed by highly leveraged long positions during a market downturn.
The current price of ETH is $2,344.51 (February 3, 2026 UTC), a 16.8% decrease from $2,819.7 on January 31st, indicating extremely fragile market sentiment. (CoinGecko )
Detailed analysis
Specific details of Yi Lihua's sell-off
According to the latest data, Trend Research, a subsidiary of E-Living Capital, has taken clear deleveraging measures:
| index | numerical values | illustrate |
|---|---|---|
| Total volume of sell-offs | 73,588 ETH | Complete within 3 days |
| value | Approximately US$169 million | Calculated by average price |
| use | Repay Aave debt | Reduce liquidation risk |
| Current holdings | 618,000 ETH | Still holding a large position |
| Average cost | Approximately US$3,180 | Significant unrealized losses |
| liquidation price | It has dropped to $1,558 | Reduce risk through loan repayment |
Trend Research employs a cyclical strategy of "collateralized lending—buying—recollateralized lending," which puts it under severe margin pressure when ETH prices fall. To avoid forced liquidation, the institution has been forced to continuously sell ETH for USDT, then deposit the USDT back into Aave to repay loans. (Odaily Odaily)
Market Background and ETH Price Trend
ETH has recently experienced a significant decline, with the specific price performance as follows:
| date | Opening price | highest price | Lowest price | closing price | Daily change |
|---|---|---|---|---|---|
| 2026-01-31 | $2,819.7 | $2,823.35 | $2,641.68 | $2,702.41 | -4.2% |
| 2026-02-01 | $2,702.88 | $2,709.04 | $2,354.67 | $2,443.93 | -9.6% |
| 2026-02-02 | $2,447.42 | $2,468.76 | $2,235.66 | $2,269.33 | -7.1% |
| 2026-02-03 | $2,267.71 | $2,387.64 | $2,166.00 | $2,344.51 | +3.3% |
This drop has almost completely wiped out all of ETH's gains since July 2025, returning it to levels seen at the beginning of 2025. (CoinGecko )
Exchange traffic analysis
ETH exchange traffic data reflects the flow of funds:
| date | Net inflow | Total Inflow | Total outflow |
|---|---|---|---|
| 2026-02-03 | +58,921.5 | 2,317,560 | 2,258,640 |
| 2026-02-02 | -26,304.2 | 1,903,950 | 1,930,260 |
| 2026-02-01 | +51,759.9 | 1,104,260 | 1,052,500 |
| 2026-01-31 | -58,592.7 | 1,355,160 | 1,413,750 |
Data shows that ETH experienced a significant net inflow into exchanges during the market downturn, indicating increased selling pressure. (CryptoQuant)
Market Impact Assessment
Short-term impact (negative)
Increased market selling pressure : Yi Lihua's selling directly added approximately $169 million in selling pressure to the market, further depressing the price of ETH.
Psychological impact : The public sell-off by a prominent bull exacerbated market panic. The proportion of panicked discussions about Bitcoin on social media has risen to its highest level since 2026, while market sentiment indicators have fallen to their lowest point since last November.
Leverage liquidation risk : Trend Research's case serves as a reminder of the risks of high-leverage strategies in the market, which may trigger preventative liquidation of other leveraged long positions.
Medium- to long-term impacts (differentiation)
Strong on-chain fundamentals : Despite the price drop, ETH's on-chain fundamentals have actually strengthened.
- Record high staking volume: 36.6 million ETH are staked on the Beacon Chain, exceeding 30% of the circulating supply.
- Staking queue hits record high: Over 4.08 million ETH are currently in the staking queue, with a waiting time of 7 days.
- The staking exit queue is almost empty.
Institutional buying continues : The mysterious entity "7 Siblings" spent $57.21 million to buy 24,139 ETH in the past two days, at an average price of $2,370, indicating that institutional investors are accumulating tokens during the decline.
Smart Money's contrarian strategy : Nansen data shows that Smart Money addresses bought $38.3 million worth of ETH against the market trend in the past week.
Industry comparison and risk assessment
Other large ETH holders
| mechanism | ETH holdings | Average cost | Current unrealized loss | Strategy characteristics |
|---|---|---|---|---|
| BitMine | 4,285,125 pieces | $3,837 | $6.95 billion | Low leverage, high collateral, zero debt |
| Trend Research | 618,000 pieces | $3,180 | Approximately $500 million | High leverage, revolving lending |
| SharpLink Gaming | not disclosed | not disclosed | $1.09 billion | not disclosed |
While BitMine suffered a larger unrealized loss ($6.95 billion), its "low leverage, high staking, zero debt" strategy, with 67% of its ETH staked, generates over $1 million in cash flow daily, making it more resilient to risk. (Odaily Odaily)
Systemic risk analysis
Yilihua's sell-off reflects broader market issues:
- The vulnerability of highly leveraged systems : Revolving lending strategies amplify gains during uptrends but accelerate losses during downtrends.
- The disadvantages of transparency in game theory : On-chain transparency means that the operations of large holders are observed by the entire network, making them easy targets for attacks.
- Market linkage risk : The crypto market is increasingly correlated with traditional financial markets (especially precious metals), making it vulnerable to external shocks.
Investment insights and suggestions
Direct impact on ETH
- Short-term pressure persists : Yi Lihua still holds 618,000 ETH, and may be forced to continue selling if the price falls further.
- Liquidation risk : The current liquidation price has dropped to $1,558. If ETH falls below this level, it could trigger a larger-scale liquidation.
- Market sentiment recovery will take time : After a sharp decline, market confidence needs time to recover, and short-term rebounds may be limited.
Advice for investors
- Beware of high-leverage strategies : Yi Lihua's case illustrates the dangers of high leverage in a falling market.
- Focus on on-chain fundamentals : Despite the price drop, ETH's staking rate and network security are still improving.
- Phased entry opportunity : For long-term investors, the current price may offer an opportunity to build a position in stages.
in conclusion
Yi Lihua's sale of 160,000 ETH did indeed have a negative impact on the ETH market, mainly in terms of increasing short-term selling pressure and dampening market sentiment. However, this reflects more the individual predicament of highly leveraged investors during a market downturn than a fundamental deterioration in ETH's fundamentals.
The core contradiction : The current ETH market is experiencing a clear "two extremes" phenomenon - on one hand, secondary market prices are falling and leveraged liquidations are occurring, while on the other hand, on-chain staking rates are hitting new highs and long-term funds are continuously flowing in.
Key observation points :
- Can the price of ETH hold the $1,558 liquidation level?
- Will the pledge ratio continue to rise?
- Will institutional investors continue to buy on dips?
Yi Lihua's selling spree is part of the market deleveraging process, which, while painful, contributes to a healthier market. For long-term investors, focusing on the continued improvement of ETH's fundamentals is more important than overemphasizing short-term price fluctuations.