Ethereum (ETH) recently suffered one of the sharpest declines of 2026, falling by more than 20% and briefly testing the $1,500 area. While the selloff appears to reflect broader market fears, derivatives and on-chain data suggest a more complex story May appear beneath the surface.
Prolonged liquidations drive ETH down amid cold spot market
ETH experienced one of this Biggest decline in 2026 Last week, it fell more than 20% from $2,000 to around $1,550, a decline that continued through the second week of May.
While the recent selloff was triggered by new geopolitical tensions in the Middle East and rising rate-hike expectations lack of deep selling Spot markets indicated that derivatives had accelerated the decline.
Over the past week, selling pressure on spot markets was modest, as evidenced by a fairly flat trend in exchange net flows and minimal changes in retail and whale wallet balances.
However, derivatives tell a different story. ETH price has closely tracked the shift in ETH net taker volume towards seller dominance. The metric, which measures the difference in volume between buyers and sellers of ETH perpetuals using market orders, turned negative on May 11. Seller dominance is increasing rapidly Last week.
The metric showed a similar move from late January to early February, with ETH prices also falling.
Additionally, a Eliminate leveraged long exposures This put further pressure on already falling prices.
During the initial phase of the market decline in mid-May, long traders continued to take profits, buying on the dip and reducing their liquidation value. This move is evidenced by Ethereum open interest reaching a record high of 15.98 million ETH and increasing funding rates despite falling prices during this period.
However, ETH, the top altcoin, is under pressure along with broader market forces Further down to $1,500Inducing forced long liquidations as traders sold collateral in an already weak market. Following this move, open interest ultimately declined, as did negative funding rates.
ETH sets a potential low near $1,500
Historically, such resets in open interest and funding rates align with signs of market declineAfter a period on the sidelines, the spot encourages buyers to come forward.
Institutional investors in the US appear to be taking the hint, as US spot ETH exchange-traded funds (ETFs) recorded net inflows of $82.3 million on Monday, according to SoSoValue data. At the same time, the Coinbase Premium Index, a measure of US sentiment, moved upward after ETH reached the $1,500 level.
A similar trend is visible on Ethereum exchange Reserves, which saw an increase in withdrawals as ETH approached $1,500. Changes in these metrics indicate that this level has led to a decline in buying activity among investors, making it a key onchain support level and potential local bottom.
Ethereum price forecast: ETH maintains momentum above $1,500
On the daily chart, ETH is extending a clear bearish bias as the price is well below the 20-, 50- and 100-day exponential moving averages (EMAs), with the short-term EMA near $1,853 and longer-term gauges rising from around $2,027 to $2,176. This configuration suggests that rallies remain corrective within a broader downtrend.
Momentum indicators such as the 14-day Relative Strength Index (RSI) slipping into oversold territory near 28 and a depressed Stochastic near 28 indicate that downside pressure is strong, but could translate into a consolidation or corrective bounce rather than a sustained recovery.
At the top, initial resistance emerges at $1,741, followed by a tight band around $1,806 and $1,909, before a more notable range near $2,019 and the 50-day EMA around $2,043. Additional hurdles lie at $2,108 and the 100-day EMA at $2,187, ahead of the $2,211 and $2,389 levels.
On the downside, the immediate focus is on the latest pivot around the current price area, followed by support at $1,524 and then $1,405, where buyers will need to show up to prevent the bearish structure from turning lower.
(The technical analysis for this story was written with the help of AI tools.)
