Ether (ETH) dropped below $2,000 on Thursday morning for the first time since late March, down nearly 8% over the past seven days with losses exceeding 5% in the last 24 hours alone, according to CoinDesk data. The sell-off comes amid broader market risk aversion, yet futures open interest has surged to a record high, creating a notable divergence that analysts say signals aggressive shorting.
Market Context
The broader cryptocurrency market has experienced increased risk aversion, contributing to ETH's downward momentum. This decline occurs against a backdrop of significant institutional outflows from U.S. spot Bitcoin ETFs, which saw $733.43 million in net losses on Wednesday—extending a multi-session streak that has pulled more than $2 billion from the sector overall. BlackRock's iShares Bitcoin Trust (IBIT) recorded its second-biggest single-day net outflow since launch at $527.84 million.
Analysis
The divergence between ETH's falling price and rising futures open interest points to aggressive shorting activity. Ether futures open interest hit a record high of 16.39 million tokens, equating to approximately $32.5 billion in notional value, on Thursday according to data from Coinglass. This marks the third consecutive day of increases. The combination of this elevated open interest with a negative seven-day OI-adjusted cumulative volume delta (CVD) and declining spot price indicates that market orders are driving bearish bets rather than passive limit orders. Markus Thielen, founder of 10x Research, noted that higher bond yields have made ETH staking yield unattractive while the asset generates no revenue. Spot Ether ETFs listed in the U.S. have seen cumulative outflows of $401 million this month, more than reversing April's $354 million inflow according to SoSoValue data.
Key Numbers
- ETH fell below $2,000 for first time since late March; down nearly 8% over seven days and exceeding 5% in last 24 hours
- Futures open interest reached record 16.39 million tokens ($32.5B notional), third consecutive day of increases
- Spot Ether ETFs recorded cumulative outflows of $401M in May, reversing April's $354M inflow
- BlackRock's IBIT saw $527.84M net outflows Wednesday, second-largest single-day withdrawal since January launch
What to Watch
ETH has dropped below the psychologically significant $2,000 level for the first time since late March, establishing a new near-term support test. The record futures open interest combined with negative volume delta suggests bears remain in control, though elevated leveraged positions could trigger sharp squeezes if upside catalysts emerge. Upcoming Ethereum protocol developments and network activity metrics will be key to watching whether the fundamental case supports any price recovery or if selling pressure continues to mount amid deteriorating sentiment.