Why did the price of Ethereum (ETH) fall today?

Source: Cointelegraph Original text: "Why did the price of Ethereum (ETH) drop today?"

Key points:

The price of Ethereum has fallen by more than 4% in the past 24 hours, reaching about $2575 on May 15. The decline of ETH is in line with the downward trend in the broader cryptocurrency market, which has seen a total market capitalization decrease of approximately 2.40%, down to $3.3 trillion.

ETH/USD four-hour chart. Source: Cointelegraph/TradingView

Let's take a look at some factors that are driving down the price of Ethereum today.

According to data from CoinGlass, Ethereum's open interest (OI) has decreased by 4.5% in the past 24 hours to $31.52 billion. The decline in open interest indicates a reduction in trader confidence and liquidity, with investors exiting the market, pushing prices down.

ETH derivatives data. Source: CoinGlass

The decline in ETH prices triggered liquidations, with long positions worth $64.6 million being forcibly closed on that day, while the liquidation amount for short positions was approximately $21 million.

The broader cryptocurrency market has also experienced severe deleveraging events, with a total liquidation amount of all assets reaching $312 million.

Cryptocurrency Market Liquidation (24 hours). Source: CoinGlass

The combination of forced selling and low market participation has intensified the bearish momentum for Ethereum. The long-short ratio over the past 24 hours is 0.9558, and trading volume has decreased by 32.5%, indicating that bullish sentiment is weakening.

ETH long-short ratio chart. Source: CoinGlass

According to data from Cointelegraph Markets Pro and TradingView, Ethereum's impressive surge over the past week has pushed its Relative Strength Index (RSI) above 70 on both short and long time frame charts, indicating that it is in an overbought state.

The RSI heatmap of CoinGlass shows that the RSI for ETH is 71 and 73 on the 12-hour and daily time frames respectively.

ETH/USD daily chart. Source: Cointelegraph/TradingView

Ethereum's price also faces strong resistance in terms of rising, with the resistance range between $2600 and $2800. Note that this is the current position of the 200-day simple moving average (SMA).

Renowned crypto analyst Michael van de Poppe stated that Ethereum needs to break through this resistance to increase its chances of setting a new high in 2025.

"If this situation occurs with ETH, it would indicate a significant upward potential for the entire altcoin market."

Source: Michael van de Poppe

The short-term downside target is between $2100 and $2230, which according to Van de Poppe could provide a good entry point for late investors.

As reported by Cointelegraph, Ethereum's dominance in the cryptocurrency market has reached its most overheated level since May 2021, and historically, this level often signals a significant correction.

Related recommendations: Three main reasons why Ethereum (ETH) price may soar to $5000 in 2025.

This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should conduct their own research before making decisions.