Ethereum Plummets 6% to $2,200 Amid Bearish Sentiment

Ethereum has recently experienced a significant breakdown, with its price hovering near $2,200 at the time of reporting. This decline is attributed to surging selling pressure across futures markets and negative funding rates, indicating a bearish sentiment among traders. The Relative Strength Index (RSI) is nearing oversold levels, the Chaikin Volume Divergence (CVD) is in the red, and high Open Interest suggests that the strong bearish momentum may persist.

Futures traders are exhibiting a clear bearish stance. The Taker Buy/Sell Ratio has dropped to 0.93, its lowest point in over a month, reflecting a sharp increase in sell-side aggression. This metric has been below 1 since Friday, aligning with Ethereum's breakdown below $2,300. The intensifying sell-side pressure is eroding market sentiment, suggesting a continued downward trajectory for Ethereum. With buyers hesitant and no strong bids to absorb the decline, futures market signals point to further downside risk.

Despite Ethereum’s price drop, Futures Open Interest (OI) remained elevated at $28.19 billion. However, this high OI, paired with a falling Taker Buy/Sell Ratio, indicates a market dominated by short-side conviction rather than bullish optimism. As prices slide and volatility increases, this build-up of leveraged positions could become fuel for further downside. Unless bulls step in with strong buy-side volume, Ethereum’s open interest may unwind.

Ethereum’s daily RSI is scraping oversold levels at 34, with no signs of reversal, so momentum still favors sellers. Meanwhile, CVD remained deep in the red, reinforcing that aggressive market selling is the dominant force behind the recent breakdown. Additionally, ETH’s Funding Rates have flipped negative across most exchanges, indicating that shorts are paying to keep their positions open. The downtrend is well-supported, and any recovery attempt may struggle to gain traction in the near term.

Ethereum's price has experienced a significant decline, dropping from $2,448 to $2,300, indicating that bears are currently in control of the market. This sharp decrease has raised concerns among investors about whether buyers will defend this price zone or if more pain is ahead. The downward trend in Ethereum's price is part of a broader market sentiment that has seen other cryptocurrencies face sharp downside volatility, triggering long liquidations across major exchanges. The current retracement in the cryptocurrency market could offer a golden entry point for investors, particularly if Bitcoin finds support around the $100,000 zone. However, a breakdown below $2,100 for Ethereum could lead to a bearish retest, potentially taking prices down to about $1,500 to $1,600. This scenario highlights the volatility and uncertainty in the market, as investors grapple with the potential for further declines.

The strengthening of the dollar this summer could be a significant factor contributing to the 'pain trade' in the cryptocurrency market. Non-U.S. stock markets, particularly those in Asia, have been affected by the strengthening dollar, which could further impact the performance of cryptocurrencies. The mixed signals from on-chain metrics for Ethereum, despite strong buying pressure from whales and steady inflows into the network, add to the uncertainty in the market. Investors are closely watching for signals of a long-term breakout in the cryptocurrency market, particularly with the speculation around ETF approval heating up. However, the current market conditions suggest that caution is advised, as the bears appear to be in control. The downward trend in Ethereum's price, coupled with the volatility in other cryptocurrencies, indicates that more pain could be ahead for investors in the near term.