Ether Crash: The Alarming 30% Plunge and the Search for a Price Bottom

Ether (ETH), the native cryptocurrency of the Ethereum network, has led a brutal market-wide selloff, crashing 30% in just seven days and shattering the critical $2,000 psychological support level. As of Friday, May 23, 2025, the global digital asset market faces intense pressure, with analysts scrutinizing a confluence of bearish technical and on-chain signals to determine where the bleeding might stop. This steep decline marks Ether’s lowest valuation in nine months, plunging the second-largest cryptocurrency into uncertain territory and raising urgent questions about its near-term trajectory.

Ether Leads Crypto Market Carnage with Historic Drop

The past week delivered a severe blow to cryptocurrency investors. Ether’s price action has been particularly dramatic, tumbling from approximately $2,800 to a weekly low of $1,740 before a slight recovery to $1,900. This performance represents the largest weekly drawdown among all top-ten cryptocurrencies by market capitalization. Consequently, the broader market has felt the ripple effects. Bitcoin (BTC) declined 21% to trade around $66,340, while other major assets like Solana (SOL) and XRP posted losses of 29% and 21%, respectively. The collective downturn has erased roughly 20% from the total crypto market cap, pushing it toward $2.23 trillion.

This selloff was not a quiet affair. Data reveals intense futures market liquidations, with over $400 million in Ether long positions forcibly closed in a single 24-hour period. This metric clearly indicates a wave of panic selling and margin calls among leveraged traders. Furthermore, the recently launched US spot Ethereum Exchange-Traded Funds (ETFs), instead of providing a stabilizing inflow of capital, have recorded staggering net outflows totaling $1.1 billion over the past two weeks. This institutional selling pressure has compounded the downward momentum.

On-Chain Data Points to Sustained Selling Pressure

Beyond price charts, blockchain analytics paint a concerning picture of distribution. Notable entities, including the analytics firm Trend Research and even Ethereum co-founder Vitalik Buterin, have been identified moving significant amounts of ETH to exchanges. Such movements often precede sales, adding to the overhead supply that the market must absorb. The sharp decline in aggregate open interest—the total value of outstanding futures contracts—by more than $15 billion further underscores a mass exodus of speculative capital from the Ether market. These combined factors create a powerful headwind for any immediate price recovery.

Technical Analysis: Mapping Ether’s Potential Downside Targets

Technical analysts are now closely examining long-term charts to identify historical support zones that could halt the decline. A critical development was Ether’s breach below the 200-week Simple Moving Average (SMA), a key benchmark often used to define long-term bull and bear markets. The last decisive break below this level occurred in March 2025, an event followed by a subsequent 45% price drop. If a similar pattern unfolds, it projects a potential decline toward the $1,400 region.

Several other chart patterns converge on a similar downside range. Analysts have identified the following key technical targets:

• Inverse V-Pattern Target: This bearish formation points to a objective near $1,385.
• Inverse Cup-and-Handle Target: A separate classical pattern suggests a pull toward $1,665.
• MVRV Bands: This on-chain valuation model indicates a zone around $1,725.

The clustering of these independent analyses around the $1,400-$1,700 band gives it heightened significance. Moreover, data from on-chain analytics firm Lookonchain highlights three major liquidity pools—areas with high concentrations of potential stop-loss or liquidation orders—sitting at $1,500, $1,300, and $1,000. These levels could act as “magnets” for the price during a volatile decline.

The Critical Role of On-Chain Support and Investor Cost Basis

Understanding where current holders bought their Ether is crucial for predicting potential support. Glassnode’s UTXO Realized Price Distribution (URPD) model shows the density of coins acquired at various price levels. A critical insight from current data is the relative lack of significant buying volume below the $1,900 mark. This suggests there may be few natural buyers ready to step in until price reaches much lower, historically significant accumulation zones.

The next substantial on-chain support cluster appears near $1,200, where approximately 1.5 million ETH were last moved. This zone represents a major historical cost basis for a cohort of investors and could serve as a strong defensive line for the ETH price. The path to this level, however, would likely be fraught with volatility, passing through the identified liquidation zones at $1,500 and $1,300.

Broader Market Context and Contributing Factors

While Ether’s decline is pronounced, it is essential to view it within the wider financial ecosystem. Traditional markets have also shown weakness, with equities facing pressure from macroeconomic concerns like persistent inflation and shifting interest rate expectations. Cryptocurrencies, still perceived by many as risk-on assets, often exhibit heightened correlation with tech stocks during periods of broad market fear. Additionally, regulatory uncertainties and the performance of the spot ETF products have introduced new variables into Ethereum’s market structure that were absent in previous cycles.

The underperformance of the spot Ethereum ETFs versus expectations has been a particular surprise for the market. After their launch was heralded as a major bullish catalyst, the consistent outflows indicate that institutional demand in the current risk-off environment is tepid. This reality has forced a rapid reassessment of the near-term supply and demand dynamics for ETH.

Conclusion

The dramatic 30% Ether crash has unequivocally shifted market sentiment from cautious to bearish. The breach of major technical supports like the 200-week SMA and the $2,000 level, combined with sustained selling from ETFs and large holders, creates a challenging environment for a swift recovery. Technical and on-chain analysis collectively points toward lower price targets in the $1,000-$1,400 range, with key levels at $1,665, $1,385, and $1,200 warranting close observation. While volatility remains extreme, these data-driven zones provide a framework for understanding where the current Ether price decline might find a sustainable bottom. Investors and traders must now monitor both macroeconomic developments and blockchain-specific metrics for signs of stabilization.

FAQs

Q1: Why did Ether’s price crash 30%?
The crash resulted from a combination of factors: broad crypto market sell-off, massive long position liquidations in futures markets, significant net outflows from US spot Ethereum ETFs, and reported selling activity from large holders, creating overwhelming selling pressure.

Q2: What is the 200-week SMA and why is it important?
The 200-week Simple Moving Average is a long-term trend indicator. Ether falling below it is considered a major bearish signal, as it suggests the long-term uptrend may be broken. The last break below it preceded a 45% price drop.

Q3: Where are the main support levels for ETH price according to analysts?
Key support zones identified through technical and on-chain analysis cluster between $1,000 and $1,700, with specific levels at $1,665, $1,500, $1,385, $1,300, and $1,200 being closely watched.

Q4: How have Ethereum ETFs performed during this crash?
Contrary to expectations of providing support, US spot Ethereum ETFs have seen approximately $1.1 billion in net outflows over two weeks, contributing to the selling pressure instead of alleviating it.

Q5: What does UTXO Realized Price Distribution (URPD) data show?
Glassnode’s URPD data shows where current ETH holders originally bought their coins. Current analysis indicates a lack of high-volume purchase zones below $1,900, suggesting few natural buyers may emerge until price falls to lower, historically significant support levels near $1,200.