Ethereum has experienced a significant decline, dropping over 10% in the past week to hover around $2,110. While brief recoveries were noted, the overall market outlook appears bleak. Most major cryptocurrencies have performed better than Ethereum recently. The rise in U.S. Treasury yields has been a key factor, agitating a sell-off throughout the crypto markets.
Why Are Treasury Yields Impacting Crypto?
The recent spike in the yield on U.S. 30-year Treasury bonds, which reached 5.19%, a peak not seen since 2007, has had a noteworthy impact. Japan also recorded a milestone with its 10-year bond yield hitting 2.81%. These developments have led investors to gravitate towards safer assets, thereby diminishing their appetite for riskier, digital currencies.
Significantly, more than $700 million in Ethereum positions were liquidated as part of a broader market correction, with Bitcoin also affected by large-scale sell-offs, though Ethereum was hit harder overall.
The cascade of selling was largely driven by the liquidation of long positions, catalyzing increased downward pressure on Ethereum in the near term as technical analysis suggests further declines.
Are Major Investors Losing Confidence?
Yes, according to CryptoQuant data, approximately 386,000 ETH were withdrawn by sizeable wallets, holding between 100 and 10,000 ETH, over a recent one-week span. This indicates a lack of confidence among larger holders, who typically possess more sway in market prices.
Initially, these whale wallets accumulated 330,000 ETH but then quickly reversed, leading to net outflows. This rapid change in behavior suggests skepticism about current market valuations.
In recent analyses, around 60 major Ethereum holders adjusted their positions significantly, with warnings that the cryptocurrency’s price could dip below the crucial $2,000 level if the current trend persists.
Key findings include:
- Ethereum trades below critical exponential moving averages, indicating ongoing bearish conditions.
- Technical indicators like RSI and the Stochastic Oscillator suggest little room for a bullish reversal soon.
- Critical resistance points are identified at $2,120 and $2,150.
- Support levels at $2,085 and $2,075 may not hold if selling pressure intensifies.
Trading near $2,108 as of May 20, Ethereum faces continued scrutiny from investors. Key support zones and whale activity remain under watch, with caution expected to sustain in coming days.
