Ether Price Sell-Off Continues Amid Market Risk Aversion

Ether’s (ETH) price sell-off is intensifying as broader market risk aversion takes hold. Despite this downward trend, the futures market for ETH remains active, creating a notable divergence with bearish implications.

The price of ETH has fallen below $2,000 for the first time since late March, experiencing a nearly 8% decline over the past week. In the last 24 hours alone, losses have exceeded 5%, according to data from CoinDesk.

Markus Thielen, founder of 10x Research, highlighted the current sentiment around ETH, stating, “More and more people are giving up on ETH as it doesn’t generate revenue, and with higher bond yields, the staking yield is unattractive. The only buyer has been Bitmine, but they indicated that they will slow down their purchases.”

Despite the price decline, open interest in ether futures has been on the rise for the third consecutive day, reaching a record high of 16.39 million tokens, equivalent to a notional open interest of approximately $32.5 billion. This influx of funds into futures, a leveraged product that magnifies gains and losses, indicates a divergence from the bearish price action.

However, the record open interest, coupled with a negative seven-day OI-adjusted cumulative volume delta (CVD) and the decreasing spot price, suggests aggressive net selling. A negative CVD implies that traders are driving price movements through bearish bets via market orders rather than passive limit orders.

The bearish sentiment extends beyond futures trading to spot Ether ETFs listed in the U.S., which have seen cumulative outflows of $401 million this month, surpassing the $354 million inflow recorded in April, according to SoSoValue data.

Additionally, sentiment surrounding Ether has weakened with high-profile departures from the Ethereum Foundation, including notable contributors Carl Beekhuizen and Julian Ma.

David Hoffman, co-founder of Bankless, recently announced the sale of his ETH holdings after concluding that the long-standing thesis of “ETH is money” has largely played out. This shift in sentiment signals a broader questioning of Ethereum’s dominance in DeFi, tokenization, and other sectors and how it translates back to its native token, ETH.

Web3 research and consultancy firm House of Chimera emphasized Ethereum’s continued leadership in ecosystem development activity but noted that market prices and sentiment can deteriorate faster than developer commitment.