Ethereum (ETH) saw a sharp decline in price on 19 May, falling below a crucial support level as the broader cryptocurrency market underwent a widespread sell-off. Despite the downturn, several analysts view the dip as a potential buying opportunity, expecting a recovery in the near term.
Ether Drops Over 5% Amid Market-Wide Sell-Off
Ether’s price fell by over 4.5% in the last 24 hours to reach approximately $2,380. According to data from TradingView, the cryptocurrency dropped nearly 10% intraday, from a high of $2,587 on 18 May to a low of $2,353 on 19 May. The daily trading volume soared by 110% to $30.4 billion, indicating intensified selling pressure.
Ethereum’s decline was in line with the broader crypto market, which saw a 1.4% drop in total market capitalisation to $3.25 trillion. Bitcoin (BTC) registered modest losses of 1%, trading above $102,900, while other major altcoins like XRP and Solana (SOL) recorded sharper declines of 2.3% and 4.5%, respectively.
Moody’s US Credit Downgrade Sparks Risk-Off Sentiment
The downturn in crypto prices follows Moody’s decision on 17 May to downgrade the United States’ sovereign credit rating from Aaa to Aa1. This is the first downgrade by the agency since 1919 and was driven by concerns over the US’s ballooning $36 trillion national debt, ongoing fiscal deficit, and a perceived lack of political resolve to address spending issues.
The downgrade caused significant turbulence across financial markets, pushing Treasury yields higher and encouraging a “risk-off” approach among investors. According to The Kobeissi Letter, a prominent market commentator, the move heightened economic uncertainty and undermined investor confidence in riskier assets such as cryptocurrencies.
Higher yields tend to raise borrowing costs, which can hurt businesses and consumers alike. Coupled with persistent recession fears and limited expectations of interest rate cuts from the US Federal Reserve in 2025, speculative assets like Ethereum are facing added pressure.
Long Liquidations Deepen ETH Decline
The sharp drop in Ethereum’s price was exacerbated by a wave of long liquidations. Over $255 million worth of ETH positions were liquidated in the past 24 hours, with approximately $200 million or 78% stemming from long positions.
These forced sell-offs occur when traders using leverage fail to meet margin requirements, prompting exchanges to automatically sell their assets. This accelerates downward pressure and intensifies the market correction.
The broader crypto market also experienced significant deleveraging, with total liquidations amounting to $665 million across assets. In the last 12 hours alone, more than $430 million in leveraged positions were wiped out.
ETH Loses Key Technical Support Levels
Ethereum’s decline saw it fall below key support levels, including the 50-day Simple Moving Average (SMA) at $2,530 and $2,400. Market analysts had previously indicated that ETH needed to hold above the $2,400 mark to maintain bullish momentum.
With this level breached, attention now turns to the next support zone between $2,330 and the $2,274 low recorded on 9 May. If ETH fails to stay above this range, it may further decline toward $2,250, where the 100-day SMA currently lies.
Technical indicators also signal growing bearish sentiment. Ethereum’s Relative Strength Index (RSI) dropped to 38 on 19 May from overbought territory at 86 on 9 May, suggesting increased profit-taking and a shift in market sentiment.
Analysts Call for Caution but See Opportunity
Despite the sell-off, some analysts remain optimistic about Ethereum’s medium-term prospects. Popular crypto analyst Michael van de Poppe described ETH under $2,400 as a “steal,” suggesting it offers a strong “buy-the-dip” opportunity for investors anticipating a rebound.
While the market remains cautious amid macroeconomic uncertainty, many see the current correction as a natural part of the cycle, especially following the strong rally ETH had seen in previous weeks.
Investors are now watching closely to see if Ethereum can consolidate above its next support range or if further downside awaits. The coming days will be critical in determining whether bullish momentum can be regained.
