to leave a comment.
▲ Ethereum (ETH), cryptocurrency decline/AI-generated image ©
As one of the two major pillars leading the virtual asset market showed a particularly sharp decline and collapsed, global investors are growing increasingly nervous about the movements of large institutions behind it and the collapse of investor sentiment. This sharp decline has been confirmed to be more than just a general downturn in virtual assets; it's compounded by the mass exodus of influential market figures and continuous capital outflows from institutional investors, significantly increasing downward pressure.
According to CoinMarketCap, a cryptocurrency market data aggregator, on May 23 (local time), Ethereum (ETH) plummeted 4.44% over the past 24 hours, falling to $2,027.52, underperforming the overall bearish average of the virtual asset market. On-chain data analysis firm Santiment diagnosed that market sentiment this month has rapidly deteriorated from optimism to frustration, disappointment, and fear. Furthermore, news that Bankless co-founders completely sold off their ETH holdings and that the Harvard University Endowment liquidated its entire $86.8 million position invested in BlackRock's spot Ethereum ETF, 'iShares Ethereum Trust,' has triggered a cascade of selling due to a loss of confidence among influential market players and institutions.
Signals of institutional exodus are clearly evident in fund flows. The spot Ethereum ETF market experienced capital outflows for nine consecutive trading days, with a net outflow of $32.4 million recorded on May 22 alone, according to CoinGlass data. Of course, this decline was also influenced by accompanying factors such as a macro-economic liquidity crunch and risk-off sentiment across the broader market, with Bitcoin falling 3.39% and the total virtual asset market cap decreasing by 3.27% to $2.5 trillion. However, ETH showed its vulnerability by experiencing a drop more than 1 percentage point greater than the market average due to its own negative catalysts.
From a technical structure perspective, Ethereum is currently facing a critical test of its support levels. The current price has broken below the lower bound of the key Fibonacci golden zone, which ranges from $2,095 to $2,138, as well as the 7-day Simple Moving Average (SMA) of $2,124. The key intraday watershed is presented at the $2,067 level, and if the daily closing price falls below this point, there is a risk of a rapid decline to the strong support band established in March, ranging from $1,900 to $2,000. While the 7-day Relative Strength Index (RSI) registers 31.48, indicating a short-term oversold condition and potential for a technical rebound, the Moving Average Convergence Divergence (MACD) histogram continues to show a negative value of -23.01, suggesting strong bearish momentum.
Consequently, the Ethereum market is trapped in a downward spiral of continuous selling pressure from institutions and frozen investor sentiment, making it difficult to avoid further downward pressure for the time being. Experts believe that the overall downward trend will continue until daily fund flows for Ethereum spot ETFs sharply reverse to net inflows or buying pressure activates to firmly reclaim the short-term neutral benchmark of $2,150. The key determinant of the short-term direction is whether the $2,067 support level will be defended to establish a floor over the next 24 hours, or if a cascade of liquidations will occur, pushing the price back to the $1,900 level.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
Newsletter
Get key news delivered to your email every morning
to leave a comment.