Ethereum Faces Headwinds as Price Drops Below $2,500 Despite Growing Institutional Interest
Technical resistance at 200-day moving average and declining network metrics signal challenging path ahead, though Ethereum ETF inflows
Quick overview
- Ethereum is experiencing significant selling pressure, having fallen over 6.5% in the last 24 hours and trading below $2,500.
- Technical analysis indicates further downside risk, with potential price drops to the $2,260-$2,110 range.
- Despite a decline in price, institutional interest remains strong, with $700 million in net inflows to US-based Ethereum ETFs recently.
- Competitive pressure from other networks like Solana is increasing, while Ethereum's total value locked has dropped by 17%.
There is a lot of selling pressure on Ethereum ETH/USD right now. After falling more than 6.5% in the last 24 hours, it is now trading below the crucial $2,500 level. Even if institutional investors are intrigued in it, the second-largest cryptocurrency by market cap has had a hard time keeping up its pace. This shows how hard it is to figure out what makes its price go up or down.
ETH/USD Technical Analysis Points to Further Downside Risk
The technical picture for Ethereum shows worrying signs for bulls who want to drive prices up to the $3,000 mark. ETH recently hit its 200-day Simple Moving Average and was turned down. This level has always been a barrier since the cryptocurrency’s spectacular 40% rise from May 8 to 13.
The fall below a rising wedge pattern shows that prices could drop further more, possibly to the $2,260–$2,110 region. The 50-day SMA acts as dynamic support in this range. The most important resistance levels are now $2,500, $2,540, and $2,600. The most important support levels are now $2,380 and $2,320.
Technical indicators support the bearish view, with the MACD gaining strength in the negative range and the RSI falling below the neutral 50 mark. The Stochastic Oscillator is now in an oversold state, which could mean that the market will rebound back soon.
Ethereum Network Fundamentals Show Mixed Signals
Ethereum’s ecosystem offers both good and bad things, even though the price has gone down. The good news is that the network is back on top of stablecoin activity, with more than $11 trillion in volume across Layer 1 and Layer 2 solutions in 2025 alone. This is a substantial change from 40% of the market in 2024 to 60% presently.
The number of stablecoin transactions went up at the same time that transaction costs dropped substantially, by more than 92% to less than 1 gwei in April. Since then, though, fees have gone up 150% every month. This has made the protocol’s burn mechanism stronger and reduced the inflationary pressure on the quantity of ETH.
Other network metrics, on the other hand, reveal the opposite trend. The total value locked (TVL) dropped 17% to 25.1 million ETH. Sky (formerly MakerDAO) and Curve Finance, two important protocols, saw large outflows. Sky lost 48% and Curve Finance lost 24%.
Competitive Pressure Intensifies
Ethereum is under more and more competition from other networks, especially Solana, which has seen a rise in decentralized exchange (DEX) volume. Ethereum is currently the third-largest DEX market share, behind BNB Chain and Solana. In June, Uniswap processed more over $2.6 billion in daily volume, up from $1.65 billion in early May.
As decentralized applications like Hyperliquid and Pump prefer to develop their own blockchains instead of building on Ethereum’s Layer 2 solutions, the competition gets tougher. This pattern could mean that the company’s market share would slowly shrink over time.
Institutional Interest Provides Price Floor
Even if there are technical and structural problems, demand from institutions is still strong. Between May 22 and June 4, US-based spot Ethereum ETFs brought in $700 million in net inflows. There were no days when they lost money over this three-week period. This ongoing interest from institutions seems to be keeping prices around the $2,500 mark.
The streak of ETF inflows reached 13 days on Wednesday, with $56.98 million in net inflows. This shows that professional investors still have faith in the market, even when prices are changing a lot.
Futures Markets Signal Cautious Sentiment
The futures markets reveal that professional traders are not very confident in a bullish market. As of June 5, the Ether futures premium had reduced to 5%, down from 6% the week before. More importantly, ETH futures haven’t traded above a 10% premium since late January, which shows that leveraged traders are still being careful.
Ethereum Price Prediction and Outlook
If Ethereum wants to hit $3,000 soon, it will have a hard time because of the way things are set up and how they work. The rejection at the 200-day moving average, together with the dropping network TVL and more competition, implies that there isn’t much potential for development.
For bulls to take back control, ETH needs to climb back above the rising wedge support and make a significant move over the 200-day SMA, which is between $2,750 and $2,850. The next objective might be the $3,250 resistance zone if these levels are reached.
If Ethereum doesn’t stay above its current support levels, it might test the $2,260-$2,110 zone. This is where historical support and the 50-day moving average could help it bounce back.
The most recent transfer of 61,966 ETH tokens worth $159 million makes the market less stable. This could suggest that significant holders are selling their coins since the market is going down.
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