Trump's Announcement of Imminent Iran Deal, Will Ethereum Hold the $2,100 Support Line?

▲ Ethereum (ETH) / ChatGPT generated image ©

As geopolitical risks ease and US investor sentiment rapidly contracts, the second-largest player in the virtual asset market is engaged in a fierce battle at a key support level.

According to investment media FXStreet on May 20 (local time), Ethereum (ETH) has maintained the $2,100 line since US President Donald Trump announced that negotiations with Iran had entered their final stage. President Trump warned reporters at the White House that discussions with Iran were in their final stages, but if no deal was reached, tough measures could be taken. Despite expectations of easing geopolitical tensions, rising US Treasury yields and persistent inflationary pressures have led to a worsening buying sentiment among US investors.

Indeed, the Coinbase Premium Index, which indicates US investor participation, continued its decline that began in late April, falling deep into negative territory. The poor performance of this indicator, which shows the price difference between Coinbase and Binance, directly reflects the risk-averse nature of institutional investors. SoSoValue data also showed a net outflow from the Ethereum spot ETF market for seven consecutive days, with $62.3 million withdrawn in a single day on Tuesday, demonstrating a slowdown in actual demand within the US.

On the other hand, the derivatives market shows a mixed trend, with leveraged buying entering to secure downside rigidity. Futures open interest, which plummeted by more than 1 million ETH due to large-scale long position liquidations last weekend, increased by about 500,000 ETH again since Monday, partially filling the gap. The fact that the futures funding rate remains positive despite price declines and liquidation pains suggests that dip buyers are actively leveraging to establish a bottom.

From a technical perspective, ETH is currently hovering around $2,130, extending its short-term bearish trend. The current price is below the concentrated zone of the 20-day, 50-day, and 100-day Exponential Moving Averages (EMAs) ranging from $2,234 to $2,328, indicating strong upward resistance. The daily Relative Strength Index (RSI) has fallen to around 37, and the Stochastic Oscillator has entered a deep oversold territory, suggesting that short-term downward momentum is dominant, but selling pressure may reach its limit with further declines.

If bullish forces successfully defend the short-term horizontal support line of $2,108, they are expected to test the primary resistance line of $2,211, the 20-day EMA of $2,234, and the 50-day EMA of $2,247 in sequence. The key to a medium-to-long-term trend reversal lies in whether it can break above the 100-day EMA of $2,328 and the resistance level of $2,389 above it on a closing basis. It is pointed out that if the crucial stronghold of $2,108 support breaks, downside risks will be fully activated, potentially leading to a deep correction phase, pushing it down to $1,909, $1,741, or even as low as $1,524.

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