Source: Cointelegraph
Original: (Why did the price of Ethereum (ETH) drop today?)
Key points:
Ethereum's price has fallen over 4% in the past 24 hours, reaching about $2575 on May 15. The drop in ETH aligns with the downward trend in the broader cryptocurrency market, which saw a total market cap decline of about 2.40%, down to $3.3 trillion.
ETH/USD four-hour chart. Source: Cointelegraph/TradingView
Let's take a look at some factors driving the decline in Ethereum's price today.
According to CoinGlass data, Ethereum's open interest (OI) has fallen by 4.5% in the past 24 hours, to $31.52 billion. The decline in open interest indicates reduced trader confidence and liquidity, with investors exiting the market, pushing prices down.
ETH derivatives data. Source: CoinGlass
The pullback in ETH price triggered liquidations, with $64.6 million worth of long positions being forcibly closed that day, while the liquidation amount for short positions was about $21 million.
The broader cryptocurrency market also experienced severe deleveraging events, with a total liquidation amount of $312 million across all assets.
Cryptocurrency market liquidation (24 hours). Source: CoinGlass
The combination of forced selling and low market participation has intensified bearish momentum for Ethereum. The 24-hour long-short ratio stands at 0.9558, with trading volume down 32.5%, indicating that bullish sentiment is waning.
ETH long-short ratio chart. Source: CoinGlass
According to data from Cointelegraph Markets Pro and TradingView, Ethereum's remarkable surge over the past week has pushed its relative strength index (RSI) above 70 on both short and long time frame charts, indicating an overbought condition.
CoinGlass's RSI heatmap shows that ETH's RSI is 71 and 73 on the 12-hour and daily timeframes, respectively.
ETH/USD daily chart. Source: Cointelegraph/TradingView
Ethereum's price also faces strong resistance on the upside, with the resistance range between $2600 and $2800. Note that this is the current position of the 200-day simple moving average (SMA).
Renowned crypto analyst Michael van de Poppe states that Ethereum needs to break through this resistance to increase the likelihood of hitting new highs in 2025.
“If this situation occurs with ETH, it would indicate a significant upward potential for the entire altcoin market.”
Source: Michael van de Poppe
The short-term downside target is between $2100 and $2230, which according to Van de Poppe, could provide a good entry point for late investors.
As reported by Cointelegraph, Ethereum's dominance in the crypto market has reached the most overheated level since May 2021, historically indicating significant pullbacks.
Related articles: Three major reasons why Ethereum (ETH) price could soar to $5000 by 2025
This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should conduct their own research before making decisions.
