Ethereum Derivatives Flooded With $1B in Sells as Markets React to Trump

Several crypto assets declined on Friday after Donald Trump’s speech triggered panic across global markets. Defying expectations for restraint, Trump outlined plans for potential military action against Iran over the next two to three weeks.

Ethereum, for instance, saw heavy sell pressure flood the derivatives market.

Massive Derivatives Sell-Off

According to the latest analysis by CryptoQuant, there has been a sharp surge in Ethereum sell activity following remarks by Trump that escalated tensions around the Iran conflict.

Markets had initially expected a de-escalatory tone. But, in the address, Trump said Operation Epic Fury had achieved major results after one month, including weakening Iran’s military and reducing its missile capabilities. He added that goals are close to completion and warned that stronger attacks would continue over the next two to three weeks. In response, traditional markets reacted immediately, as seen with US Treasury bonds moving higher and the S&P 500 losing approximately $500 billion in market capitalization within minutes.

The impact quickly extended to the cryptocurrency market, particularly derivatives trading. CryptoQuant stated that Ethereum recorded more than $1 billion in sell volume in derivatives markets within a single hour as short-term bearish pressure intensified. Of this, around $968 million occurred on Binance, which currently accounts for the largest share of global crypto trading volume.

The sudden influx of sell orders contributed to a decline of over 4% in ETH’s price over the same period. The financial markets are now “facing a period of extreme uncertainty and volatility, making price action increasingly erratic and unstable,” the crypto analytics firm added.

Weakening Institutional Support

Spot Ethereum ETFs saw eight straight days of outflows as rising geopolitical tensions weighed on investor sentiment and risk appetite. This selling trend briefly reversed, as these investment vehicles recorded inflows over the next two sessions. However, the recovery was brief, as weakening institutional support led to renewed outflows. On April 1, spot Ethereum ETFs again faced pressure, recording more than $7 million in net outflows.

With both derivatives and institutional flows showing signs of strain, analysts at Bitunix explained,

“The market has entered a new phase dominated by ‘supply chain destruction.’ Energy, metals, and geopolitics are converging to elevate inflation expectations without providing growth support, creating a classic misalignment between risk and pricing. In the absence of a policy anchor or a clear exit path from conflict, asset prices will continue to be driven primarily by liquidity conditions and shifts in risk appetite.”

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