Ether (ETH) fell sharply after that rejection for $2,400 last week, dropping as low as $2,100 on Monday, indicating the bears are back “in control,” according to new analysis.
Key conclusions:
- Ether falls 12% after rejection to $2,400 as bears regain control.
- Binance selling pressure and ETF outflows signal weak demand for ETH.
- Analysts warn that ETH/USD could fall towards $1,700 if it breaks the $2,000 support.
ETH bears aggressive selling
Data from TradingView shows that the price of ETH was trading at $2,100, down 12% from the local high of $2,420 reached on May 6. On Sunday, ETH/USD hit $2,090 on Bitstamp, the lowest level since April 17.
ETH/USD hourly chart. Source: Cointelegraph/TradingView
Bearish sentiment could return to the Ether market as a key metric from Binance, the largest crypto exchange by trading volume, shows that sellers are beginning to dominate the platform’s volumes.
Related: Rising oil prices fueled pressure on ether sales: Tom Lee
Binance taker buy volume, which measures the total dollar amount of aggressive sell orders placed by traders on Binance futures, climbed above $1.1 billion within an hour on Sunday as ETH moved towards levels below $2,100.
When this metric rises during a price decline, it often indicates forced risk reduction or strong short-term bearish pressure from active market participants.
Ether saw “large aggressive spikes in selling volume on Binance as it tested important bearish levels,” CryptoQuant analyst Amr Taha he said in a QuickTake note on Monday, adding:
“This does not necessarily confirm the start of a deeper downtrend. However, it does show that sellers were clearly in control during the move.”
ETH Receiver Sales Volume on Binance. Source: CryptoQuant
Increasing outflows from ETH investment products have further increased the pressure on the sell side.
Data from SoSoValue shows that US-based spot Ethereum ETFs have seen net outflows for five consecutive days, totaling $255 million.
This suggests that “institutional momentum has hit a localized wall for Ethereum,” Whale Factor analyst he said in Sunday’s post, adding:
“This heavy sell-side distribution is keeping a tight lid on prices for now.”
Spot ETH ETF Flow Chart. Source: SoSoValue
Global Ethereum investment products also saw $249 million in outflows during the week ended May 15, the most since January 30, according to data from CoinShares shows.
A cluster of 3.5M ETH at $2000 could moderate the selloff
According to Eterov cost-based distribution datainvestors are holding approximately 3.85 million ETH at an average cost basis of $2,000-$2,100, creating a potential support zone. This concentration suggests that many investors may increase their positions at the break-even point, potentially reducing another decline in the price of ETH.
Ethereum underlying price distribution chart. Source: Glassnode
Like Cointelegraph reportedthe price of ETH could potentially fall towards $1700 after confirming the rising wedge pattern on the daily time frame. Traders, however, say the bearish momentum could be halted if ETH/USD holds above $2,000.
“$ETH dropped below $2,100 as it failed to hold the $2,150 support zone,” he said crypto analyst Ted Pillows at X posted on Tuesday, adding:
“The next key support for Ethereum is the $2050-$2070 level, which could allow for a recovery.”
ETH/USD daily chart. Source: X/Ted Pillows
Technical analyst Donald Dean he said ETH bulls need to defend “lower volume shelf support near $2,100” to avoid moving below the rising channel on the daily chart.
ETH/USD daily chart. Source: X/Donald Dean
Fellow analyst Cryptorphic he said if the ETH/USD pair fails to “hold this area and consolidate below it, we could see a continuation towards lower support levels,” adding:
“The recent dip below the local support area shows that buyers are getting weaker in the short term.”
Meanwhile, the CEO of Sharplink pointed out three catalysts that the price of ETH must rise higher, including the passage of the CLARITY Act in the US, the return of risk appetite across the market and the growth of real-world asset tokenization on Ethereum.
