Author: Gabby

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.

Trump Media & Technology Group has moved an additional 2,650 Bitcoin, valued at approximately $205 million, to the Crypto.com exchange. This transaction, spotted by blockchain tracker Lookonchain, has intensified scrutiny of the company’s cryptocurrency strategy amid significant losses on its holdings.

The transfer originated from wallets associated with Trump Media, the parent company of Truth Social and predominantly owned by the Donald J. Trump Revocable Trust. While deposits to exchanges don’t guarantee an immediate sale, market participants typically view large inflows as a potential precursor to liquidation.

Earlier this year, the firm shifted 2,000 BTC (worth about $175 million) when Bitcoin was trading near $87,378. Since then, the market has worsened, with BTC hovering around $77,700 at the time of the latest transfer. Based on prior disclosures, Trump Media originally amassed 11,542 Bitcoin at an average cost of $118,522 per coin, spending nearly $1.37 billion. After the earlier transfer, its holdings dropped to 9,542 BTC; following the latest movement, the stash now appears to be roughly 6,889 BTC.

The company’s recent financial results already reflected the downturn. Trump Media reported a $405.9 million net loss for Q1 2026, with $368.7 million attributed to unrealized markdowns on digital assets and pledged crypto. As of March, the fair value of its Bitcoin holdings had fallen to about $647 million against a cost basis of $1.13 billion. The firm also disclosed ownership of roughly 756 million Cronos tokens linked to its Crypto.com partnership.

What does this mean for Bitcoin? Large exchange inflows can spark temporary fear among traders, as visible supply on order books may act as a resistance zone. However, the $205 million transfer is relatively small compared to Bitcoin’s multi-billion dollar daily trading volume. The market impact will depend on whether the coins are sold directly on the exchange or via over-the-counter channels. On-chain data shows that over 70% of Bitcoin’s circulating supply has remained unmoved for over a year, indicating strong long-term holder conviction despite corporate treasury weakness.

The perpetrator behind the exploit of the Verus Ethereum bridge has returned 4,052.4 ETH, approximately $8.5 million, to the project team following a negotiated settlement. This move leaves the attacker with 1,350 ETH, valued at around $2.86 million, as a bounty for returning the majority of the stolen funds.

Blockchain security firm PeckShield confirmed the transaction, noting that the returned assets constitute 75% of the total funds drained during the incident. The remaining 25% was intentionally left with the exploiter as a reward, per the terms proposed by the Verus community. On-chain data from Etherscan reveals that the return occurred on May 21, with the funds moving from a wallet labeled as Verus Exploiter 2 to a designated team address. Shortly after, the bounty amount was transferred to a separate wallet.

This outcome has sparked mixed reactions in the crypto community. Some observers, like Bee Swarm, view the 75% recovery as a positive precedent, suggesting that bounty-driven negotiations can be more effective than legal threats for retrieving stolen assets. Others, such as Zenthis, caution that partial recoveries do not address fundamental vulnerabilities in bridge security, arguing for more robust alternatives like atomic swaps to eliminate centralized custody risks.

The return follows a public offer from Verus, which outlined specific terms for the exploiter to follow. The community had agreed to a 1,350 ETH bounty in exchange for the safe return of the remaining funds. This approach contrasts with many past bridge attacks, where stolen assets are often laundered through mixers or remain under the attacker’s control indefinitely.

The Verus bridge exploit, which occurred on May 18, resulted in losses exceeding $11.5 million. Security researchers attributed the breach to a forged cross-chain transfer message that bypassed validation checks. The attacker initially drained 103.6 tBTC, 1,625 ETH, and nearly 147,000 USDC, later converting these assets into 5,402 ETH. Blockaid identified the root cause as missing source-amount validation within the bridge’s logic, ruling out other common attack vectors like ECDSA bypass or key compromise.

The incident adds to a growing list of cross-chain security failures. Recent attacks on the Butter Network bridge led to a 96% crash in MAPO tokens after attackers minted unauthorized tokens. Similarly, Echo Protocol faced a $76.7 million exploit involving fake eBTC collateral. These events highlight the persistent risks in bridge security, where weak validation can enable attackers to trigger unauthorized transfers or mint tokens before teams can intervene.

Bitcoin’s price slipped toward the $77,000 mark on Friday after it broke down from an ascending trendline that had been propping up its recovery since April. The digital asset struggled to hold above $82,000, a level reinforced by the 200-day moving average near $80,825, and the failure triggered fresh selling pressure.

Over the past week, leveraged long positions took a heavy hit, with liquidations ranging from $661 million to $850 million across exchanges as Bitcoin slid from its May peaks. The cascade of forced selling accelerated the downturn, pushing prices into thinner liquidity zones.

Institutional demand also softened, as U.S. spot Bitcoin ETFs recorded roughly $1.4 billion in net outflows over the last week. BlackRock’s IBIT saw one of its largest daily outflows during this period, and other major issuers faced consistent redemptions amid a broader reduction in risk appetite.

On-chain data added to the bearish narrative, with 9,664 BTC worth over $744 million moving to exchanges in the past five days, signaling potential selling pressure. Additionally, Trump Media & Technology Group transferred 2,650 BTC to Crypto.com, drawing attention to possible large-holder distribution.

The decline occurred during Bitcoin Pizza Day week, a time that usually boosts trading activity and highlights Bitcoin’s long-term gains. However, this year’s event was marred by rising volatility and worsening macro conditions.

Rising oil prices added to market stress, with WTI crude climbing above $98 per barrel amid geopolitical tensions involving Iran. Higher oil costs compounded inflation fears after recent U.S. CPI and PPI data exceeded expectations. Treasury yields rose as markets priced in fewer Fed rate cuts, and expectations of a hawkish Fed leadership shift further dampened sentiment.

Technically, Bitcoin’s breakdown below the ascending trendline and its failure to reclaim the 200-day moving average have weakened its daily structure. The price now sits below its 20-day moving average and is approaching the 50-day moving average near $76,427, a key support level. The MACD histogram has turned negative, erasing April’s bullish momentum.

Liquidation data from CoinGlass shows dense long liquidation clusters between $76,000 and $76,500, with another concentration near $74,000. This suggests Bitcoin may sweep lower before stabilizing. Trader Lennaert Snyder noted that Bitcoin’s daily candle closed weak after failing to reclaim $78,200, and he expects a sweep of sell-side liquidity at $76,400 before any recovery.

ZeroStack CEO Daniel Reis-Faria told crypto.news that Bitcoin’s rejection at the 200-day moving average reflects weak buying pressure. He said that unless buying picks up, Bitcoin will likely remain under pressure. Derivatives markets also show caution, with funding rates cooling and open interest declining alongside price.

For a bearish scenario to be invalidated, Bitcoin needs to recover above $79,000 and reclaim the 200-day moving average near $80,800. Progress in U.S.-Iran talks could lower oil prices and ease inflation concerns, while a reversal in ETF outflows would support prices. However, if Bitcoin fails to hold $76,000, it could slide toward $74,000 or even the 100-day moving average near $72,500.