TLDR
ETH fell by 11.5% in five days, from $2,738 to $2,426
Large ETH withdrawals from exchanges occurred on May 16, suggesting accumulation
Coinbase Premium Index shows increased interest from U.S. investors
Taker sell orders vastly outweigh buy orders, indicating selling pressure
Trading volume has been declining, similar to pattern seen in December 2024
Ethereum has experienced a significant price correction over the past week, dropping from $2,738 on Tuesday to $2,426 at press time. This represents an 11.5% decrease in just five days, causing many investors to question whether this is a temporary reset or the beginning of a more serious trend reversal.
The cryptocurrency has been showing mixed signals about investor interest. On one hand, negative exchange netflows suggest accumulation is taking place. May 16 saw the largest ETH withdrawal from exchanges since early April, which typically indicates investors are moving their holdings to private wallets for long-term storage.
The Coinbase Premium Index, which tracks the price difference between Coinbase and Binance, has remained positive over the past month. This metric indicates growing interest from U.S.-based investors, a trend that has been consistent since ETH began its rally from $1,600.
However, not all indicators are positive for Ethereum’s price outlook. Despite the positive premium, ETH faced rejection at the $2,800 level.
Selling Pressure Mounts
The 7-day moving average of the taker buy-sell ratio has been falling rapidly over the past week. This metric shows that taker sell orders are vastly outweighing buy orders in the market. Since these are market orders, they suggest increased selling pressure as some holders appear eager to take profits.
This pattern bears resemblance to market conditions observed in December 2024, which preceded a sharp drop in price. Investors should take note of these similarities when making trading decisions.
Trading volume has also been declining consistently over recent days. The spot volume bubble map shows low trading activity during April’s bottom, with green bubbles indicating a drop in volume. This contrasts with December 2024, when a sharp uptick in trading volume was marked as “overheating” before Ethereum faced a steep decline.
The cooling trading volume as ETH approaches the $2,600-$2,800 resistance zone may indicate buyer wariness. Alternatively, it could suggest that selling pressure from profit-takers has not been overwhelming, supporting the idea of a market reset rather than a complete trend reversal.
ETH is currently trading below $2,450 and the 100-hourly Simple Moving Average. Technical analysis identifies a bearish trend line with resistance at $2,540 on the hourly chart.
If Ethereum manages to break above the $2,550 resistance level, it could potentially move toward $2,580. A clear break above this point might open the path to the $2,700 zone or even $2,780 in the near term.
On the downside, if Ethereum fails to clear the $2,500 resistance, it may face further decline. Initial support is near $2,400, with major support at $2,350. Should the price drop below this level, it could test support at $2,320 or potentially fall to $2,220.
The most recent market data shows Ethereum has stabilized above the 61.8% Fibonacci retracement level of the upward move from $2,308 to $2,509, suggesting some support at current levels.
