Why Is Ethereum Dropping When The Data Says It Should Rise?

Ethereum(ETH) is struggling to hold above $2,100 even as nearly every on-chain indicator suggests buyers, not sellers, control the market.

Key Points:

• On-chain metrics for Ethereum point bullish, yet the price fell 14% over a 12-day stretch in May.
• A research firm blames large, concealed sell orders that absorb buying without showing up in standard flow data.
• Macro pressure from inflation and Federal Reserve policy compounds the weakness for the high-beta asset.

Ethereum Market Structure Confuses Traders

Ethereum has been trading in a tight, indecisive range, with bulls and bears locked in a standoff that has produced no clear winner. A brief recovery arrived after President Trump said the Strait of Hormuz would reopen following talks with Middle Eastern leaders, a comment markets read as easing geopolitical risk.

The relief proved short-lived.

Japan-based XWIN Research Japanexamined Ethereum's internal market structure and found that conventional metrics tell a misleading story. Spot Taker CVD stays positive, funding rates sit above zero, and exchange netflows show coins steadily leaving trading platforms for self-custody.

By those measures, Ethereum should not be falling. Yet the asset slid from roughly $2,375 on May 11 to near $2,031 on May 23, a 14% drop while every internal signal pointed the other way.

Also Read:Ethereum Staking Hits Record As 39M Tokens Leave The Market

Hidden Sellers Explain ETH Weakness

The research firm pins the contradiction on hidden liquidity. Large sell orders placed by market makers and whales sit quietly in the order book, soaking up aggressive buying without registering in the flow data that retail traders watch.

Surface signals look strong because buyers are genuinely present. The price falls anyway because the sellers are bigger, more patient, and effectively invisible.

Macro conditions deepen the problem. Despite early optimism around the CLARITY Act, markets have refocused on inflation and a higher-for-longer rate environment, a backdrop that weighs heavily on a high-beta asset that amplifies both rallies and selloffs. Recent price bounces, the report adds, reflect short covering and deleveraging rather than fresh demand building new long exposure.

Analysts flag support zones near $1,984 and $1,937, levels where ETH could look genuinely undervalued if spot demand returns and macro pressure stabilizes.

ETH Price History Shows Recent Strain

The current episode caps a difficult stretch for the second-largest cryptocurrency. ETH traded near $2,466 in April before momentum faded, and it lost the $2,200 mark for the first time since April amid rising Treasury yields and a Fear and Greed Index parked in extreme-fear territory. After repeated rejections at the $2,250 to $2,350 resistance band, the token now hovers around $2,104, leaving buyers to defend support that has held since the spring lows.

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