A five-day plunge of 11%, Ethereum has broken through an important support level.
Ethereum (ETH) has dropped over 11.5% in the last five trading days, plunging from $2,738 in mid-May to the current $2,426. Some analysts view this adjustment as a 'healthy correction' rather than a trend reversal, but market confidence still faces severe tests.
Despite the sluggish trend, on May 16, the largest single withdrawal of ETH from exchanges since early April occurred. Combined with the overall negative net inflow from exchanges, this may indicate that some long-term investors are choosing to increase their holdings at lower levels.
Coinbase premium surges, U.S. investor interest remains strong.
The Coinbase premium index shows that since April, the dollar buy orders for ETH have consistently outperformed those in the USDT trading pair, representing a growing interest in Ethereum from the U.S. market. This trend started when the price was around $1,600 and has continued to this day.
However, despite positive signals of capital inflow, ETH encounters strong resistance around $2,800, and the reversal of the market hides concerns.
Taker ratio declines, selling pressure rises significantly.
The 7-day moving average of the sell-to-buy ratio has recently dropped sharply, indicating that market sell orders far outnumber buy orders. This phenomenon also occurred in December 2024, followed by a significant drop in Ethereum's price.
The current situation is similar, with some traders clearly choosing to take profits at high levels, casting a shadow over ETH's short-term trend.
Trading volume continues to decline, is the rebound momentum weakening?
From the bubble chart of spot trading volume provided by CryptoQuant, ETH's overall trading volume has shown a downward trend in recent days. The shrinking of green bubbles represents a decrease in market participation enthusiasm, and buyers are clearly becoming more cautious.
Combining technical resistance and changes in trading volume, this shift indicates that the current selling pressure may not have peaked yet, revealing that the market is not ready to quickly resume an upward momentum.
The trend has not reversed, but a 'healthy correction' also carries risks.
Although analysts generally believe that the current situation is a 'market reset' rather than a complete reversal, on-chain data and trading behavior suggest that investors should remain vigilant about short-term volatility.
If ETH fails to hold the support area of $2,400, the risk of further declines will increase significantly. Conversely, if the market digests the current profit-taking, the next wave of rebounds may still be expected to come back under the influence of U.S. stocks and macro sentiment.
