The crypto market is flashing signs of a potential recovery from its prolonged volatility phase; however, Ethereum has continued to decline despite positive trading metrics.
Latest analysis from Cryptoquant shows that Ethereum is witnessing aggressive buying activity across both spot and futures markets, but the momentum has failed to halt its price decline.
Ethereum risks losing $2,000
Notably, Cryptoquant provided data revealing that Ethereum has declined from about $2,375 on May 11 to nearly $2,031 as of May 23.
This marks a decrease of 14.5% in the price of Ethereum in just less than two weeks, posing its price at the risk of retesting $2,000 in the near term.
While data shows that buyers are increasingly stepping in, it appears that the decline in the price of Ethereum is not being driven by a lack of buyers, but rather by an overwhelming number of sell orders absorbing incoming demand.
The data further showed that spot market activity was significantly slow during the period as trading volume fell from 470,770 ETH to 256,963 ETH, representing a 45.4% decrease in about 12 days.
Ethereum flashes mixed signals
While its futures market saw rising participation, open interest remained largely flat, as it surged by just 0.69%, moving from about $15.43 billion to $15.54 billion within the period.
Nonetheless, Ethereum's Funding Rates remained positive throughout the decline and its Futures Cumulative Volume Delta (CVD) continued to show long positioning dominance, yet its price kept plunging deeper.
This suggests that long traders continued to top up their bets to maintain their positions despite the ongoing price weakness.
While Ethereum has seen aggressive buying pressure in both spot and futures markets, analysts believe that the demand is being absorbed by available market supply and limit sell orders, hence the reason behind the consistent price dip.
Dan Burgin
