Ethereum, the second-largest cryptocurrency by market cap, took a 2.3% hit recently, dropping from its weekly highs around $2,700 to about $2,500. While such corrections aren’t uncommon in the volatile world of crypto, this pullback comes at a particularly sensitive time. Investor sentiment is being pulled in opposite directions—bullish macro trends are being countered by growing anxiety around a looming $3.1 billion options expiry.
Let’s unpack what’s really dragging ETH down today—and whether it’s just a temporary setback or the beginning of a deeper correction.
A Ripple Effect from Bitcoin’s Stumble
Much of Ethereum’s latest price decline can be traced back to Bitcoin, which has been struggling to reclaim momentum after touching highs near $108,000. Instead of continuing the climb, BTC slipped to around $102,000, shaking confidence across the crypto landscape. When Bitcoin catches a cold, the rest of the market often sneezes—especially Ethereum, which tends to move in tandem with its larger peer.
Adding fuel to the fire is the approaching expiry of a massive batch of crypto options. On May 16, a staggering $3.1 billion worth of Bitcoin and Ethereum options are set to expire on Deribit, the largest crypto options exchange. Of this, about $2.66 billion is tied to Bitcoin, while Ethereum accounts for roughly $525 million.
For ETH, the max pain point—the price level at which option holders lose the most money—is around $2,200. The current price above this level might suggest some support, but the bearish Put/Call ratio of 1.24 implies there’s more hedging against downside than confidence in an upside move.
Diminishing Volume and Open Interest Add Pressure
Trading activity is also revealing. According to CoinGlass, Ethereum’s trading volume has dropped by a dramatic 37%, down to $22.5 billion. This decline signals waning enthusiasm and cautious positioning from market participants ahead of the options expiry. Open interest—the total number of outstanding derivative contracts—has also slipped, suggesting that some traders are exiting positions rather than doubling down.
Additionally, short positions have begun to outweigh long ones across major platforms, tipping the scales further toward bearish sentiment in the short term.
Technicals Hint at Further Downside Before a Rebound
From a technical perspective, Ethereum recently broke out above a key resistance at $2,121 and even formed a promising mini golden cross—a bullish signal where the 50-day moving average crosses above the 200-day. However, the recent pullback throws a wrench into the bullish thesis.
Analysts are now eyeing a possible retracement to the $1,872 to $2,069 range, often referred to as a bullish “breaker zone” where price might stabilize before another leg up. Some even warn that if ETH dips below $1,872, it could open the floodgates to $1,700—or in a worst-case scenario, even $1,385.
Still, for long-term believers, this dip could be seen as an opportunity. Many experts view the pullback not as the end of Ethereum’s rally, but a healthy correction in a broader uptrend. If Ethereum can hold key support levels and regain momentum, there’s still a case for a return to $4,000 in the coming months.
Market Outlook: Temporary Blip or Early Warning?
Macro factors are also playing their part. While recent U.S. CPI data and signs of an improving global trade environment initially supported a crypto uptrend, lingering concerns around inflation and central bank policy are keeping investors on edge. The S&P 500 is also showing signs of topping out, which could spill over into crypto if broader risk appetite weakens.
In the near term, much hinges on how the market digests the options expiry. Will traders shake off the event and resume the climb? Or will the volatility give bears the upper hand?
For now, Ethereum is in a holding pattern—caught between macro optimism and technical caution. The coming days will be pivotal in determining whether this recent dip is a buying opportunity or a warning sign of deeper corrections ahead.
