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▲ Ethereum (ETH) ©
Ethereum (ETH), which saw governance risks emerge due to a series of departures by key developers, is now facing a severe downturn as it confronts macroeconomic headwinds from persistent inflationary pressures in the US, causing major support lines to crumble.
According to investment media FXStreet on May 22 (local time), the Ethereum Foundation (EF), the central axis of the Ethereum ecosystem, once again revealed internal cracks as researchers Karl Beek and Julian Ma announced their resignation guidelines. This brings the total number of key leadership figures who have left the foundation since February this year to eight, including Tim Beiko, Josh Stark, and Alex Stokes, with five of these resignations occurring concentratedly in May alone. As rumors of internal conflicts due to the foundation's recent organizational restructuring spread in the market, concerns are being raised that such a leadership vacuum could weaken the driving force behind 'Glamsterdam,' a major technical upgrade postponed to Q3 2026. Moreover, even David Hoffman, co-founder of Bankless, who previously declared holding 99% of his net worth in ETH, stated that he had sold all his holdings, fueling investors' fear of missing out (FOMO) sentiment.
Amid internal discord, asset manager Galaxy Digital strongly urged Ethereum to undertake fundamental innovations to restore market confidence. Lucas Cheyan, Vice President of Research at Galaxy Digital, pointed out on social media, in what served as an official document on Friday, that "Ethereum needs to focus its resources on promising areas with clear strongholds, such as high-value DeFi, asset issuance, tokenized real-world assets (RWA), and stablecoin payments." He strongly criticized that Ethereum is currently presenting overly dispersed value propositions, including ultrasound money, technological index proxies, Layer 2 payment collateral, institutional deposited assets, and AI agent currency, which is causing the market to discount the intrinsic value of the asset.
To make matters worse, the hostile climate in the macro financial environment is fueling capital outflows. This is because strong inflationary pressures in the US, soaring Treasury yields, and rising international oil prices have solidified the Federal Reserve's (Fed) stance on prolonged high interest rates, sharply reducing the attractiveness of risk assets. This demand contraction is most clearly observed in regulated product markets. Ethereum spot ETFs listed on the US stock market have recorded net outflows for an astonishing nine consecutive days, indicating persistent capital outflows, and as a result, the price of Ethereum has suffered a brutal correction, plummeting by about 12% over the past three weeks.
In technical chart analysis, Ethereum is also trapped in a clear downtrend, precariously testing its lower boundary. Based on the daily chart, the ETH price has now completely fallen below the 20-day Exponential Moving Average (EMA) at $2,208, the 50-day EMA at $2,236, and the 100-day EMA at $2,321, forming a heavy death cross selling wall. Auxiliary indicators show the Relative Strength Index (RSI) hovering around 31, closely approaching the oversold threshold of 30, and the Stochastic Oscillator is also extremely depressed, proving that downward pressure has dominated the price since the recent break below the $2,108 level. Even if buyers attempt a short-term rebound, it will be difficult to overcome the selling wall at the first resistance level of $2,107 and the 20-day EMA at $2,211.
Consequently, Ethereum's short-term fate is entirely dependent on whether it can defend the psychological round figure defense line of $2,000. If selling pressure accelerates and the primary horizontal support level of $2,018 and the key supply zone of $1,909 collapse sequentially, an additional sharp decline could unfold, opening the door to the next demand zone and a strong consolidation area from the previous crash at the $1,741 level. Experts advise that until signals of easing macroeconomic tightening are confirmed or the foundation demonstrates governance transparency, a conservative risk management approach, verifying the stability of the $2,000 support level rather than hasty chasing purchases, remains effective.
*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.*
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