Ethereum, institutional demand 'missing' despite 55% plunge...how far will it fall?

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

Ethereum (ETH) has fallen by more than half from its peak over the past nine months, but analysis suggests that the bargain hunting that typically supports prices in a downturn is not clearly emerging. An on-chain analyst diagnosed that Ethereum is facing a quiet crisis as the gap between derivatives market expectations and spot demand widens.

CryptoPotato reported on May 21 (local time), citing a report by on-chain analyst Easy On Chain, that Ethereum has entered a medium to long-term bearish phase. According to the report, Ethereum's market capitalization has decreased from approximately $585 billion in August 2025 to approximately $255 billion this month. The decline from its peak reached 55%.

Reduced institutional participation was cited as the most prominent warning sign. Fund holdings exceeded 7 million ETH in October 2025 but have recently decreased to the 5.5 million ETH to 5.7 million ETH range. The Coinbase Premium Index also remained in negative territory throughout May, suggesting that a significant portion of US-based institutional buying has exited the market.

Trading activity also contracted. Easy On Chain analyzed that daily fund trading volume has fallen significantly below the annual average in recent months, dropping to the $17 million to $42 million range. Easy On Chain described the current market as a “phase where only futures-driven optimism is building without solid spot support.”

Price trends also supported the bearish sentiment. According to CoinGecko data, Ethereum has fallen approximately 7% in the past week, over 9% in the past month, and about 17% over the past year. Compared to its all-time high of approximately $4,950 recorded in August 2025, it remained more than 57% lower.

Technical analysis also indicated continued pressure. X (formerly Twitter) analyst Ted Pillows pointed out that despite the rebound in the stock market and Bitcoin (BTC), Ethereum has failed to recover to $2,150. He stated, “Large buyers are showing no interest at all.”

The macroeconomic environment was also unfavorable. Tom Lee, chairman of Bitmine, pointed to rising oil prices as one of the reasons for Ethereum's weakness in a post on May 18. He explained that the inverse correlation between Ethereum and crude oil prices has reached an all-time high.

On the same day, geopolitical pressure increased after US President Donald Trump issued a warning to Iran, and Bitcoin fell to approximately $76,700. The total liquidation amount in the cryptocurrency market exceeded $660 million, with Ethereum-related liquidations accounting for $256 million.

Ethereum is failing to secure momentum for a rebound due to a simultaneous decrease in institutional holdings, sluggish US demand, shrinking trading volume, and a lack of spot buying. As the trend of difficulty in sustaining prices with only derivatives market expectations continues, vigilance regarding Ethereum's bearish structure has increased.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*