Why Did Ethereum Experience A Price Plunge Today?

Ethereum’s price fell over 4.5 percent in the last 24 hours to around $2,380, dragged down by a combination of technical, macroeconomic, and market structure factors.

The drop began after ETH plunged below a key support zone around $2,530, triggering over $200 million in long liquidations as traders’ leveraged positions were force sold. In Pakistani Rupees, this drop shifted ETH’s value from approximately PKR 704,396 on May 18 to PKR 679,782 today: a PKR 24,614 loss per coin.

Ethereum Price Drop: Technical Breakdown

Ethereum’s price dipped below its 50 day simple moving average at $2,530. It is a level many analysts viewed as critical support, which is why it has led to cascading liquidations.

More than $255 million of ETH positions closed out, $200 million of which were longs, exacerbating the sell off. On chain data reveals that ETH’s daily Relative Strength Index (RSI) plunged from overbought levels  of 86 to 38, signaling intensified bearish momentum and profit taking.

Institutional and Derivatives Signals

The Spot Ethereum ETF has experienced a decline in flows, with over $94 million in outflows over the past two weeks. This is indicative of the modest institutional demand for ETH exposure. In derivatives markets, funding rates shifted to the negative, and open interest decreased to $16.7 billion, a 48 percent decrease from the levels reached in January. This suggests that speculative participation and bearish sentiment have decreased.

Buy the Dip or Further Decline?

Many analysts regard the current pullback as a purchasing opportunity before ETH resumes its broader uptrend towards $3,000 and beyond, as levels near $2,400 are considered as such.

Technical patterns such as the weekly Stochastic RSI indicate that there is additional space before overbought extremes, while pseudonymous traders anticipate the $2,330 to $2,274 range as critical support.

Nevertheless, Ethereum’s ongoing scaling and network fortifying initiatives, broader crypto market sentiment, and renewed institutional inflows will be critical to a sustained recovery.