Ethereum (ETH) and Bitcoin (BTC) have started the week with a sharp pullback that has erased last week’s gains.
After a period of bullish momentum, the two leading cryptocurrencies saw a wave of sell-offs that sent prices tumbling on Sunday and in the early hours of Monday.
Nevertheless, while the broader crypto market remains volatile, analysts are closely watching whether the latest dip presents a fresh buying opportunity or signals deeper corrective moves ahead.
Why is the Ethereum price dropping today?
Ethereum’s price has taken a significant hit, falling over 5% to trade near $2,380 on May 19.
Notably, the drop comes after ETH briefly touched $2,587 the day prior, highlighting a rapid shift in market sentiment.
Data from CoinMarketCap shows a sharp decline of nearly 10% from that high to the intraday low of $2,344, reinforcing concerns among investors.
A key factor behind this decline is the break below crucial support levels, particularly the 50-day simple moving average at around $2,530 and the psychological threshold of $2,400.
This breakdown triggered a wave of liquidations, with more than $255 million in ETH positions wiped out within 24 hours. A staggering 78% of these were long liquidations, suggesting many traders had bet on the price rising but were forced to exit as prices moved against them.
Moreover, Ethereum’s downturn reflects a broader market trend. The total cryptocurrency market capitalization has slipped by around 1.4%, as investors reacted to heightened macroeconomic uncertainties.
One significant development was the US credit rating downgrade by Moody’s from Aaa to Aa1. This downgrade has sparked risk-off sentiment, prompting many traders to exit speculative positions, including crypto assets.
Why is the Bitcoin price falling today?
Bitcoin, too, has not been spared in this market-wide correction. The price of BTC dipped by roughly 1% over the past 24 hours, falling to around $103,200. Although the losses appear more modest compared to Ethereum, the trend mirrors the overall bearish shift across digital assets.
The trading range for Bitcoin in the last day stretched from a low of $102,381 to a high of $106,518, reflecting ongoing volatility.
This weakness in Bitcoin has been attributed to similar macroeconomic pressures. The Moody’s downgrade of the US credit rating has led to rising Treasury yields, further fueling fears of tightening liquidity.
As interest rates remain high and the Federal Reserve signals little intention to cut them soon, markets are bracing for prolonged financial strain. In such an environment, investors tend to move away from riskier assets, with Bitcoin often being one of the first to feel the impact.
Despite these challenges, Bitcoin’s long-term outlook remains strong, according to several analysts.
Arthur Hayes, co-founder of BitMEX, recently, during an interview with Fortune, reiterated his bullish stance, projecting that Bitcoin could hit $250,000 this year. He emphasized that a breakout above $110,000 is crucial for a true altcoin season to begin, potentially setting the stage for Ethereum and other assets to rally.
Is it a potential buy-the-dip opportunity?
While the sharp declines have rattled some traders, others view the current dip as a potential buying opportunity.
Ethereum’s drop below $2,400, in particular, is being closely watched by analysts who consider this level a key accumulation zone. Popular crypto analyst Michael van de Poppe recently described ETH under $2,400 as a “steal,” pointing to the asset’s strong fundamentals and long-term growth potential.
The increase in trading volume further supports the idea that significant accumulation may be underway.
Ethereum’s 24-hour trading volume surged by 110% to over $30 billion, indicating heightened interest, even amid falling prices. Bitcoin’s trading volume has also remained robust, surpassing $43 billion as of Monday, suggesting that institutional and retail investors are both active during the pullback.
Importantly, Ethereum continues to evolve at the protocol level. Co-founder Vitalik Buterin recently proposed a new node structure, partially stateless nodes, to help maintain decentralization while reducing reliance on centralized RPC providers. This initiative aims to improve Ethereum’s scalability and security, reinforcing its long-term value proposition.
At the same time, investment firm Metaplanet’s recent purchase of 1,004 BTC further highlights ongoing institutional interest. The firm now holds 7,800 BTC and aims to reach 10,000 by the end of 2025. Their average acquisition price stands at $91,300, signaling confidence in Bitcoin’s future despite current market turbulence.
Ultimately, while Ethereum (ETH) and Bitcoin (BTC) have both seen short-term price weakness, the underlying factors, from macroeconomic stress to technical breakdowns, may not deter long-term investors.
If market conditions stabilize and liquidity improves, today’s dip could indeed prove to be a strategic entry point. Investors should remain cautious, but for those with a long-term horizon, the fundamentals remain compelling.