Ethereum (ETH) has lost more than half of its peak value in nine months, and the buyers who typically cushion such declines have been largely absent.
On-chain analyst Easy On Chain warns that the problem runs deeper than the price drop itself. In a market report published on May 21, the group highlighted a widening disconnect between derivatives-driven activity and genuine spot demand, creating an uncomfortable market structure for Ethereum.
A Market Divided Against Itself
Easy On Chain described Ethereum as entering a medium- to long-term bear phase after its market capitalization fell from roughly $585 billion in August 2025 to about $255 billion this month. The report pointed to falling institutional participation as one of the clearest warning signs: fund holdings that exceeded 7 million ETH in October 2025 have declined to the 5.5–5.7 million ETH range.
At the same time, the Coinbase Premium Index remained negative throughout May, indicating US-based institutional buyers have largely stepped back. Trading activity has also dried up: daily fund trading volumes have fallen well below the yearly average and have recently ranged between roughly $17 million and $42 million.
Easy On Chain summarized the situation as one where “futures-driven optimism accumulates without solid spot support.” That structural disconnect is visible in recent price action: Ethereum is down nearly 7% over the past week, more than 9% across the last month, and roughly 17% over the past year, according to CoinGecko.
Ethereum currently sits more than 57% below its all-time high near $4,950, which it reached in August 2025.
Technicals Lean Bearish
Technical commentators on social platforms have echoed the bearish outlook. Despite Bitcoin reclaiming levels above $78,000, several observers argue Ethereum’s chart remains weak. Ted Pillows noted that ETH “still can’t reclaim the $2,150 level” even as stocks and Bitcoin moved higher, adding that “big buyers aren’t interested at all.”
Analyst Benjamin Cowen suggested Ethereum could revisit its April 2025 lows near the lower logarithmic regression trend line, while analyst Cryptorphic warned that a break below a rising support trend line could open the door to a move toward the $2,050 area.
Macro forces have also weighed on the market. Bitmine Chairman Tom Lee linked part of Ethereum’s weakness to rising oil prices, pointing to an unusually strong inverse correlation between ETH and crude oil. Geopolitical developments added pressure as well: following warnings issued by U.S. President Donald Trump toward Iran on May 18, Bitcoin slid to about $76,700 and the broader crypto market suffered more than $660 million in liquidations, with Ethereum accounting for approximately $256 million of that total.
Overall, the combination of shrinking institutional holdings, muted spot demand, lower trading volumes and unfavorable macro and geopolitical factors has left Ethereum’s recovery prospects uncertain. Market watchers will be watching whether spot buyers return to bridge the gap between speculative derivatives positions and real, durable demand—or whether the current divergence continues to push price action lower.