The outflow of funds from the Ethereum ETF explains the reason. In May, the net outflow from the U.S. Ethereum spot ETF was $401.62 million. This is the third-largest monthly fund outflow since the end of 2025, following the $1.42 billion in November 2025 and $616.82 million in December 2025.

1. News Analysis

Bearish:

• Ethereum fell 12.6% in May, with net fund outflows from the ETF exceeding $401 million, and the funding situation continues to bleed, with evident short selling sentiment among institutions.

• The ETH price has fallen below the 100-period moving average of $2,088, the market structure remains bearish, continuously forming foreign exchange highs and lows, and is quickly met with selling pressure after rebounds.

• Ethereum co-founder Vitalik Buterin's large-scale sell-off of ETH earlier raised market concerns.

Bullish:

• Whale addresses (clean exchanges) increased their holdings from 124.15 million Ethereum on May 1 to the current 125.17 million, accumulating over $2 billion in low-cost acquisitions.

• CME Group launched significant cryptocurrency futures and options trading on May 29, indicating that institutional funds can now access Ethereum.

• There is a hidden bullish divergence signal technically, and if confirmed, analysts believe ETH may challenge the $4,830 area again.

2. Technical Analysis

Moving Average System (Chart Interpretation):

• MA5 (green line) has crossed below MA30 (red line, thick line), forming a death cross, with a clear bearish arrangement.

• The moving averages are in a downward diverging state from a high position, indicating a strong bearish trend.

• The current price is operating below the moving averages, with no support for a bullish rebound.

Key Price Levels:

Fibonacci Analysis:

• In the Fibonacci retracement from the March low to the April high, the 0.618 level is around $2,055, highly overlapping with the dense on-chain cost area, constituting strong pressure BeInCrypto

Pattern Judgment: The chart shows that ETH forms a cup and handle pattern (inverted cup and handle), which is a bearish pattern. The rebound in mid-May only constituted the cup and handle, and the subsequent occurrence is likely to continue.

3. Operating Suggestions

⚠️ The following is a reference for technical analysis

Bearish Strategy (Trend Following):

• Entry Range: Near the resistance level of $1,900–$1,930 after a rebound.

• Stop Loss: $1,980 (exit if it recovers above the short-term moving average).

• Target 1: $1,800

• Target 2: $1,700 (after breaking).

Bullish Strategy (Oversold Rebound):

• Entry Range: Confirm after stabilizing at $1,800–$1,830.

• Stop Loss: $1,760 (strictly enforced).

• Target: $1,940 (recovery of previous low).

• Position control should remain within 10%, trying long with light positions.

Position Management: The current trend is bearish, suggesting the total position should not exceed 20%, to avoid large positions going against the trend.

4. Risk Warning

1. Continued Breakdown Risk: If $1,852 is lost and cannot be recovered, it will quickly test $1,800; stop losses must be set properly.

2. ETF Capital Flow: A net breakthrough of the ETF for more than 10 consecutive days needs to stop for the bullish trend to be truly established, and daily ETF data should be closely monitored.

3. False Breakout Risk: Whale accumulation may briefly create a rebound, but until the death cross of the moving averages is repaired, any rebound should be seen as a short-selling opportunity rather than a trend reversal.

4. Macro Risks: The direction of Federal Reserve policy and changes in the strength of the U.S. dollar remain important external variables for the overall cryptocurrency market.

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