Wintermute: "Ethereum, completely defeated by Bitcoin"...10% Plunge, Countdown to Vertical Drop

▲ Ethereum (ETH), cryptocurrency decline/AI generated image

Ethereum (ETH) price has plummeted by more than 10% in a week, with its value against Bitcoin (BTC) falling to its lowest point. Market maker Wintermute harshly criticized it as an unsuitable asset for the current macroeconomic situation.

According to crypto media outlet NewsBTC on May 20 (local time), Wintermute diagnosed Ethereum as the 'wrong asset for the current economic environment' after its price plunged by 10.2% last week. The ETH/BTC ratio, Ethereum's value against Bitcoin, fell to 0.0275, its lowest level since July 2025. Wintermute pointed out that Ethereum is bearish, lagging behind Bitcoin in both spot and derivatives markets.

Institutional investors' capital outflow is also severe. Last week, $255 million was withdrawn from Ethereum spot ETFs, marking the largest single-week outflow since late January. According to on-chain analytics firm CryptoQuant, Binance's Ethereum holdings surged from 3.4 million ETH to around 3.8 million ETH throughout May. The total Ethereum balance across global exchanges also increased from 14.5 million ETH to 14.94 million ETH during the same period, indicating a build-up of potential selling pressure.

Conversely, while retail investors dumped their holdings, mega whales engaged in accumulation. Data from on-chain data firm Santiment shows that mega whales, holding between 1 million and 10 million ETH, increased their holdings from 6.15 million ETH to 6.54 million ETH between May 1 and May 20. This means they accumulated 390,000 ETH in just 20 days. This is the opposite trend compared to mid-sized holders (10,000 to 100,000 ETH), who reduced their holdings during the same period. The selling pressure from short-term investors is being absorbed by large holders, intensifying the monopolistic structure.

This concentration of selling pressure paradoxically creates a powder keg that could trigger a short squeeze. CryptoQuant analyst Darkfost stated that the weekly taker buy/sell ratio in Binance's futures market plummeted to 0.91, the lowest figure since September 2023. This indicates that sellers are dominating the market in the futures order book. When the market is skewed to one side, a series of short position liquidations can occur, leading to a sudden surge.

Darkfost noted that while Ethereum has undergone a roughly 9% correction over the past 7 days, it is still holding within a box range between $1,500 and $4,000. He warned that the more investors excessively bet on a decline, the greater the risk of a short squeeze. A BeInCrypto article analyzed that the accumulation of 390,000 ETH by mega whales and the 0.91 sell ratio are building pressure beneath the surface, and future statements from Federal Reserve officials and macroeconomic data releases could act as triggers.

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