Why Is Crypto Crashing in 2026? Trend Research Liquidates $800M in ETH While Aave and XLM Struggle, Making Pepeto a Potential Recovery Play

Why is crypto crashing so hard right now, and who is actually being forced to sell? The answer comes down to one thing: forced deleveraging. Institutional balance sheets are under pressure, and Ethereum-focused investment firm Trend Research has been pushed to aggressively unwind its ETH positions just to meet debt obligations. That selling didn't stay contained, it triggered a ripple effect across the entire market.

Ethereum has dropped nearly 30% in a single week, dragging major DeFi platforms like Aave and payment networks such as Stellar (XLM) down with it. But while leveraged positions are being flushed out, investors looking for recovery-style opportunities are starting to shift their attention elsewhere. Early-stage projects that aren't tied to leverage cycles are moving into focus, and that's why Pepeto (https://pepeto.io/) is showing up on more watchlists, especially with over $7 million already raised in its presale as accumulation continues despite the chaos. So while forced sellers are exiting, the real question is: where is new money quietly moving next?

The Institutional Liquidation Spiral

The main driver explaining why crypto is crashing this week is the distressed selling initiated by Trend Research. The firm, which held significant leveraged ETH positions, continued offloading assets as market conditions deteriorated.

At its peak, Trend Research controlled approximately 651,170 ETH via Aave Ethereum wrapped Ether (AETHWETH). By February 6, that position had been reduced by 404,090 ETH, leaving roughly 247,080 ETH on its books. On-chain analytics from Arkham show that Trend Research transferred 411,075 ETH, worth more than $800 million at the start of the week to Binance.

This scale of forced selling flooded the market with supply, amplifying downside momentum across Ethereum and correlated assets.

Which Token to Watch During the Crypto Market Crash?

Pepeto ($PEPETO): A Recovery-Oriented Presale?

While many investors are being forced to liquidate, Pepeto is seeing the opposite behavior, steady accumulation. The Ethereum-based meme-utility project has already raised over $7 million in its presale, with demand continuing even as broader markets slide.

Pepeto (https://pepeto.io/) is structured differently from leveraged large caps. As a presale-stage project, it is not exposed to margin calls, ETF outflows, or forced institutional selling. Instead, its pricing follows a stage-based structure, allowing participants to position independently of daily market volatility.

The project combines meme culture with real infrastructure, including a zero-fee swap concept, cross-chain bridging, staking, and a planned exchange focused on verified meme-utility tokens. All core contracts have been audited by SolidProof and Coinsult, a factor often cited by observers tracking early smart-wallet positioning.

For those allocating during this phase, a $5,000 entry secures exposure at one of the lowest pricing windows. While outcomes depend on adoption and market conditions, the asymmetric setup is why Pepeto is increasingly viewed as a recovery-oriented play rather than a reactionary trade.

https://youtu.be/shxO0J94CPw?si=ugvmBXGNLNG73e3H

Aave Market Update

Aave sits directly at the center of the liquidation narrative explaining why crypto is crashing. As the protocol hosting Trend Research's ETH collateral, it has absorbed the shock of forced deleveraging.

As of February 6, Aave's token is down roughly 19% over seven days, underperforming the broader market. Sentiment around lending protocol governance tokens has shifted sharply risk-off, with investors wary of exposure during liquidation cascades.

While recovery remains possible, analysts expect it to be gradual, dependent on stabilization in ETH markets and reduced leverage across DeFi.

Stellar (XLM) Price Outlook

Stellar offers a clear example of positive developments being overshadowed by macro stress. CME recently announced the launch of Large and Micro futures contracts for XLM, normally a strong institutional validation signal.

Despite this, XLM has fallen close to 10%, as fear stemming from the Trend Research liquidation drowned out bullish catalysts. Projections still point to modest long-term growth, with some forecasts suggesting around 10% upside by late 2026, but near-term sentiment remains fragile.

The Bottom Line

Leverage is breaking, and big coins are paying the price. Ethereum, Aave, and Stellar are all being dragged lower by forced institutional selling. Pepeto sits outside that leverage trap. There's no debt unwind here, just early positioning driven by ecosystem growth and long-term demand, which is exactly why whale wallets are starting to move away from crowded large caps and into Pepeto while prices are still low.

At today's presale levels, a $5,000 allocation secures early exposure to a meme-utility ecosystem many believe is being built for the next cycle. This is how asymmetric upside usually starts, quietly, while headlines are still negative. Miss signals like this and you risk repeating the same mistake many made with Shiba Inu in 2021, waiting for certainty and arriving after the real gains were gone.

If you want to understand the opportunity while this early window is still open, visit the official Pepeto website (https://pepeto.io/) and follow Pepeto on Telegram and X to stay close as positioning accelerates.

FAQs

Why is crypto crashing right now?

Crypto is crashing primarily due to forced leverage unwinding, including Trend Research selling more than 400,000 ETH to repay loans.

How does the Trend Research liquidation affect the market?

Large-scale ETH selling injects excess supply, pushing down prices across Ethereum and correlated assets such as Aave.

What is risk-off sentiment in crypto?

Risk-off sentiment occurs when investors reduce exposure to volatile assets and move toward cash or stablecoins. In these environments, presales like Pepeto can attract interest because their pricing is detached from leveraged market swings.

Contact: Dani Bonocci
Website: https://www.tokenwire.io
Phone: +971586738991
SOURCE: Pepeto

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This release was published on openPR.