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<a href="https://jpyeur.com/eth-usd/">Ethereum</a> Sinks Under $2,000: Why Investors Should Not Panic Yet

 Key Takeaways:

  • ETH dropped to $1,977, down 12.41% on the monthly candle, 4.6% daily, 7.7% weekly
  • Bitcoin dipped to $73,000 simultaneously as Iran-US conflict escalated overnight
  • Monthly ascending trendline from 2019 still holding despite the breakdown under $2,000
  • Ethereum spot ETFs recorded outflows every single day from May 11 through May 27
  • SMA50 at $2,414 and SMA100 at $1,741 – price sitting between the two on monthly chart

Ethereum’s price fell below $2,000, closing the month at $1,977 – a 12.41% decrease for the month, 4.6% in the last 24 hours, and 7.7% over the past week. This decline coincided with Bitcoin falling to $73,000, as tensions between Iran and the US increased significantly. The US launched a second round of airstrikes in three days, targeting a drone command center in Bandar Abbas. Iran responded by attacking an American military base at 4:50 am local time. Kuwait activated its air defenses, and oil prices rose, while investments considered risky generally decreased in value.

The headline number – ETH under $2,000 – looks bad. The monthly chart tells a more specific story.

The trendline that has held since 2019

When looking at Ethereum’s price history over the long term, the current price isn’t the key thing to focus on. Instead, pay attention to a long-term upward trendline that started with the lows in 2019. This line has consistently marked the bottom of each major price cycle since then – from under $100 in 2019, through the price buildup in 2020, the low point of the 2022 crash, and the recent recovery in 2023-2024. Currently, this trendline sits around the $1,900 to $2,000 price level when looking at monthly price charts.

Despite recent price drops, the key upward trend for Ethereum, which has been in place since 2019, hasn’t been definitively broken. Although the price briefly fell below $2,000 this month, it’s currently holding above a crucial trendline. A single monthly candle touching this line doesn’t confirm a breakdown – it needs to close below it. As long as the price doesn’t finish the month below the trendline, the long-term uptrend remains valid.

As a researcher, I’m closely watching how the market behaves around this key trendline. It’s crucial to understand that a definitive monthly close *below* the trendline would signal a major structural shift – something that typically takes a long time to recover from. However, what we’re seeing now isn’t that. Instead, the price briefly touched the trendline (a ‘wick’) but then bounced back, indicating that the trendline is currently holding as support. This is a test of its strength, not a breakdown.

The SMA50 and SMA100 context

The price chart features two key moving averages. The 50-day Simple Moving Average (SMA50), currently at $2,414, is trending downwards after peaking above $4,000 in late 2024 and now acts as a resistance level. Meanwhile, the 100-day SMA, at $1,741, has been steadily increasing throughout 2024 and 2025. With the current price at $1,977, it’s positioned between these two averages – below the downward-sloping SMA50 and above the rising SMA100.

The $1,741 level, marked by the 100-day Simple Moving Average (SMA100), is the next key support level below the current trendline. If the price falls below the trendline at the end of the month, the SMA100 will be the final support before a potentially significant drop in Ethereum’s overall outlook.

Twelve consecutive days of ETF outflows

Recent price drops weren’t just due to global events. Ethereum spot ETFs experienced twelve straight days of outflows, from May 11th to May 27th. The amounts leaving the ETFs were significant, for example, $130.62 million on May 12th, $86.31 million on May 18th, and $67.15 million on May 27th. Even on days with smaller outflows, like $5.65 million on May 14th and $6.67 million on May 22nd, there wasn’t a single day of positive investment during that period.

Ethereum ETFs have experienced twelve consecutive days of net outflows, and with the price of Ethereum also nearing a key monthly support level, this created significant downward pressure, leading to the drop below $2,000. Recent global events then sped up a decline that was already happening due to consistent selling of these ETFs throughout May.

Monthly RSI at 43.20

The Relative Strength Index (RSI) currently stands at 43.20, which is notably below its average level of 50.66 – a difference of over 7 points. Looking at the monthly trend, this indicates a consistent downward movement, not just a temporary dip. While the RSI hasn’t yet fallen to the oversold level of 30, suggesting the selling pressure hasn’t fully run its course, it does signal a continuing bearish trend on the monthly chart.

When the Relative Strength Index (RSI) is at 43 and the price is near a long-term trendline that’s been in place for seven years, it’s a more promising situation than if the RSI were at 43 with no clear support levels. The trendline provides important context for the RSI reading, suggesting a potential bounce or continuation of the trend.

Why this is not yet a panic situation

There’s no need to panic just yet because Ethereum is still following the price pattern it established in 2019. While there are definitely concerning signs – like money leaving the market, a key moving average falling, global conflicts, and the price dropping below $2,000 – all of this is happening at a level that has historically acted as strong support for Ethereum over the past seven years.

Markets tend to penalize those who sell out of fear when prices hit a support level. A trendline that currently seems concerning actually presented a clear buying opportunity during the market declines of 2022 and early 2023, as it held its value then. This underlying pattern remains valid, but its continuation hinges on whether tensions between Iran and the US ease up enough to relieve the pressure that initially caused prices to fall below $2,000.

If the current truce lasts and investment funds stop selling off, looking back, this moment could prove to be a good time to buy. However, if fighting resumes and those funds continue to sell for another two weeks, it’s likely prices will fall below a key level, significantly changing the outlook.

Right now, the most important thing to watch on the Ethereum chart is the upward trend. It’s still intact, and there’s still time for things to change this month.

This article is for informational purposes only and shouldn’t be considered financial, investment, or trading advice. Coindoo.com doesn’t support or suggest any particular investment or cryptocurrency. It’s crucial to do your own research and speak with a qualified financial advisor before making any investment choices.

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2026-05-28 08:56