Ethereum Breaks Below $2,200, Market Fear Intensifies Again

▲ Ethereum (ETH), cryptocurrency decline/AI-generated image ©

Ethereum has fallen below the $2,200 support level, increasing bearish pressure. The surge in US Treasury yields coupled with outflows from cryptocurrency spot ETFs is spreading selling pressure across risk assets.

According to CoinMarketCap, a cryptocurrency market data aggregator, on May 17 (local time), Ethereum (ETH) recorded a 1.66% decline over the past 24 hours, trading at $2,179.98. This drop was larger than Bitcoin's (BTC) 0.98% decline during the same period, and ETH showed a high correlation with the S&P 500, indicating sensitivity to macroeconomic variables.

The biggest factors behind the decline are rising US interest rates and outflows from spot ETFs. Influenced by higher-than-expected US inflation figures, the US 2-year Treasury yield rose to 4.09%, fueling concerns in the market about prolonged high interest rates. Concurrently, US Bitcoin spot ETFs saw a total of $1 billion in outflows over the week, ending a six-week streak of net inflows. The media analyzed that Ethereum was also directly affected by this deteriorating macroeconomic environment.

Technical trends also acted as a burden. ETH fell below $2,200, which was considered a psychological support level, and the breakdown of a price range that had successfully provided support multiple times confirmed selling pressure. The 7-day Relative Strength Index (RSI) stood at 42.5, indicating a bearish trend but not yet entering the oversold zone. Furthermore, the entire Layer 1 sector declined by 1.21%, dampening investor sentiment across altcoins.

The short-term turning point is the $2,150 to $2,180 range. This range is considered a critical support level, coinciding with the 111-day moving average. If this range breaks down, there is a possibility that ETH could quickly fall to the $2,000 to $2,100 area. Conversely, for a rebound, analysis suggests that ETH first needs to recover $2,300 and then break through the resistance zone between $2,350 and $2,400.

The market is focusing on the future interest rate path of the US Federal Reserve (Fed), Treasury yield trends, and ETF fund inflows as key variables. Experts believe that while the bearish trend is likely to continue in the short term, the ability to hold the $2,150 support will be a crossroads for further correction or a rebound.

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