Ethereum is experiencing a notable downturn in investor sentiment during May, as multiple factors converge to create selling pressure. According to Santiment, the market capitalization of ETH has dropped by 11.6% over a two-week period, bringing the asset dangerously close to the $2,000 threshold—a level not seen since late March. If the current bearish momentum persists, a breach below that mark could occur.
Santiment’s analysis reveals that Ethereum’s social dominance has increased even as its price falls. While this often signals heightened attention, the tone of conversations has shifted toward fear and frustration rather than optimism. In April, bullish commentary significantly outweighed bearish remarks, but by May the ratio has nearly balanced, indicating a sharp decline in trader confidence.
ETF outflows are a primary source of downward pressure. Santiment reports that several Ethereum ETFs, including those linked to BlackRock, have experienced sustained outflows throughout May. Notably, no single day has seen inflows exceeding $50 million in the past three weeks. JPMorgan has also highlighted weaker demand for Ether compared to Bitcoin, noting that Bitcoin ETFs have recovered roughly two-thirds of recent outflows, while Ether ETFs recovered only one-third. The bank suggests that without stronger decentralized finance activity and real-world applications, ETH and other altcoins may continue to underperform.
Personnel changes at the Ethereum Foundation have further eroded sentiment. Carl Beek and Julian Ma recently announced their departures, adding to broader organizational shifts. Santiment notes that such developments, even when lacking full context, quickly influence trader behavior. While Ethereum still leads in raw developer activity, retail traders are increasingly drawn to faster-moving rival ecosystems.
Network growth metrics have also cooled. Daily active addresses and new wallet creation have slowed compared to stronger periods in 2024 and 2025, suggesting waning demand for ETH. As of May 22, Ethereum was trading around $2,125 to $2,135, keeping it near the critical support zone that traders are monitoring closely. Santiment concludes that while extreme bearish sentiment could set the stage for a contrarian rebound, the immediate focus remains on whether Ethereum can restore demand and defend the $2,000 level.