Ethereum (ETH-USD) just slipped below a critical support level. The price fell over 5% to $2,380 on May 19 after losing as much as 10% overnight. Trading volume spiked 110% to $30.4 billion as sell pressure hit the gas. It’s the kind of move that leaves traders wondering if they missed a memo — or if this is the dip before the next bounce.
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The downturn wasn’t isolated. Bitcoin (BTC-USD) dipped too, along with other altcoins like Solana (SOL-USD) and XRP (XRP-USD). The total crypto market cap dropped 1.4% to $3.25 trillion.
Moody’s Downgrade Sparks Risk-Off Spiral
Part of the market shudder came from a May 17 decision by Moody’s to downgrade the U.S. credit rating from Aaa to Aa1. The trigger? A ballooning $36 trillion debt load, Fiscal gridlock, and rising interest costs. Treasury yields spiked and investors ran for cover. “Yields are surging again following the Moody’s downgrade,” said The Kobeissi Letter on X.
That’s bad news for risk assets like crypto. As yields rise, borrowing gets more expensive and safe assets look more attractive.
Long Liquidations Worsen Ethereum Sell-Off
The bloodbath wasn’t just nerves — it was forced selling. Over $255 million in Ethereum positions were liquidated in the last 24 hours, with 78% being long bets, per CoinGlass. That creates a feedback loop. Traders get margin-called, exchanges dump their positions, and the price plunges further.
ETH lost support at both its 50-day SMA ($2,530) and the $2,400 floor. With RSI now sliding to 38, analysts say momentum has flipped bearish. But others see opportunity. Analyst Michael van de Poppe called sub-$2,400 levels a “steal.”
Vitalik Buterin Pushes New Scaling Fix
In the middle of the chaos, Ethereum co-founder Vitalik Buterin proposed a fix for long-term decentralization. He introduced “partially stateless nodes,” which let users run private, lightweight versions of Ethereum — without needing massive storage. His plan? Make it easier to scale without handing power to centralized RPC providers.
At the time of writing, Ethereum is sitting at $2,399.61.
