Ethereum is struggling to stay above $2,100 as the market exhibits indecision that has left both bulls and bears in a bind with no clear solution. A brief rally occurred when President Trump said the Strait of Hormuz would be opened following talks with Middle East leaders over Iran and regional peace efforts – markets interpreted these comments as a potential easing of geopolitical tensions, and Bitcoin and Ethereum rallied in response. The relief was real but short-lived.
XWIN Research Japan examined the structure of Ethereum’s internal market during the rally and discovered something that significantly complicates the simple interpretation of the recent price weakness. The data that normally identifies a healthy market is present. Spot Taker CVD remains positive – buyers still outpace sellers in order flow. Funding rates are always above zero: participants in derivatives pay to stay long rather than to stay short. Exchange Netflow shows that ETH continues to leave exchanges – coins moving to self-custody rather than the sell side.
According to every conventional bullish signal, Ethereum should not trade where it is. The asset fell from around $2,375 on May 11 to nearly $2,031 on May 23 – a 14% decline that occurred when all internal market indicators were pointing in the opposite direction.
XWIN Research Japan’s analysis identifies the force that explains the contradiction – and it is not visible in any of the indicators that signal strength.
Hidden sellers, macroeconomic headwinds and a market that looks strong but continues to decline
The XWIN Research Japan report precisely identifies the mechanism behind the contradiction. Hidden liquidity is the structural explanation for how positive CVDs, positive funding, and FX outflows can coexist with falling prices. Large sell orders placed by market makers and whales remain in the order book, absorbing aggressive buying without announcing themselves in the metrics monitored by retail participants.
Surface signals appear bullish as buyers are truly present. The price falls because the sellers are bigger, more patient and invisible to conventional flow analysis.
Ethereum Market Structure Analysis | Source: XWIN Research Japan
The macro environment aggravates structural pressure. Although the CLARITY Act initially improved sentiment toward digital assets, markets quickly refocused on inflation risks and the higher, longer interest rate environment that continues to define Federal Reserve policy. For a high-beta asset like Ethereum – which amplifies both upward and downward movements relative to broader risk sentiment – this macroeconomic backdrop remains a persistent headwind that no amount of on-chain improvement can completely neutralize as long as it persists.
The derivatives image adds the final layer. Healthy uptrends simultaneously require increasing open interest, stable funding, and expanded long positioning. Instead, current data shows short covering and deleveraging, which has led to recent price rebounds – mechanical movements rather than a return of real demand to create new directional exposure.
Technically, Ethereum is approaching support zones at around $1,984 and $1,937 – levels that the report identifies as potentially important if macroeconomic conditions stabilize and real spot demand returns. At these prices, the asset could potentially be considered truly undervalued relative to its network fundamentals. Whether this reassessment comes before a test of deeper levels depends entirely on whether hidden selling pressure exhausts before technical support.
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