Ethereum’s price took a nosedive today, shedding over 4.5% of its value to land at approximately $2,380. This stark decline unfolded amid a broader cryptocurrency market retreat, reflecting a collective sentiment of unease fueled by external economic pressures. The tumultuous 24-hour period saw Ethereum’s trading volume soar by 110% to $30.4 billion, underscoring the fierce sell-off activity.
Ethereum Leads the Crypto Market Downturn
It’s not just Ethereum feeling the heat—other crypto heavyweights are also grappling with losses. Bitcoin dipped by a modest 1% to remain just over $102,900, while altcoins such as XRP and Solana suffered more pronounced setbacks, dropping 2.3% and 4.5%, respectively. This widespread retreat coincides with the unsettling news of Moody’s Ratings downgrading the United States’ credit score to Aa1 from Aaa. The downgrade, citing a staggering $36 trillion national debt and escalating fiscal deficits, has sent ripples through financial markets. Investors, spooked by the prospect of higher Treasury yields and looming economic uncertainties, are adopting a “risk-off” stance—steering clear of speculative assets like cryptocurrencies.
“Yields are surging again following the Moody’s downgrade,” remarked The Kobeissi Letter, a capital markets commentator, in a May 19 post on X. The higher yields imply steeper borrowing costs, further straining businesses and consumers amid recession jitters and fiscal turmoil.
Long Liquidations Fuel Ethereum’s Descent
Ethereum’s decline is further exacerbated by a surge in long liquidations. Over the past day, more than $255 million in Ethereum positions were obliterated, with long liquidations making up a staggering 78% of this total. This cascade of forced sell-offs arises when traders, banking on Ethereum’s price surge, fail to meet margin requirements, prompting exchanges to offload their holdings to mitigate losses. The situation is mirrored across the crypto landscape, where a sweeping deleveraging event saw total liquidations exceed $665 million. For insights into how traders are navigating these turbulent times, see our recent coverage on Ethereum bulls showing interest as traders’ confidence in ETH’s $1.8K level improves.
Ethereum’s fall is marked by its breach of critical support levels, notably the 50-day simple moving average at $2,530 and $2,400. Analysts had previously identified the $2,400 mark as a crucial threshold for sustaining upward momentum. Now, attention pivots to the next significant support zone between $2,330 and $2,274—a range previously tested on May 9. A failure to hold these levels could see Ethereum slip further towards the $2,250 region, aligning with the 100-day SMA.
A Buying Opportunity or a Cautionary Tale?
As Ethereum grapples with its current trajectory, the RSI has plummeted to 38 from 86 earlier this month, signaling mounting bearish momentum. Yet, some voices in the crypto community, like popular analyst Michael van de Poppe, suggest that Ethereum below $2,400 presents a “steal,” hinting at a buy-the-dip opportunity before a potential rally to new highs. This perspective aligns with discussions on how restaking can make DeFi more secure for institutional traders, potentially bolstering confidence in the market.
While the turbulence in the crypto markets raises questions about the sustainability of current trends, investors remain divided. With the Federal Reserve holding firm on its interest rate stance and economic uncertainties looming large, the road ahead is anything but clear. As always, navigating these volatile waters requires a careful balance of risk and research.
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This article is based on: Why is Ethereum (ETH) price down today?
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
