Ethereum is struggling to break above $2,100 as the market shows indecision, with bulls and bears continuing to spar with each other without a clear resolution. A brief respite came when President Trump said the Strait of Hormuz would open after talks with Middle East leaders on Iran and regional peace efforts. The market interpreted this statement as a potential easing of geopolitical tensions, and both Bitcoin and Ethereum rallied in response. The relief was real, but it didn’t last long.
XWIN Research Japan investigated the internal market structure of Ethereum during its recovery and discovered something that considerably complicates a direct interpretation of the recent price decline. There is usually data that identifies healthy markets. Spottaker’s CVD remains positive. Buyers still outnumber sellers in order flow. Funding rates remain above zero, and derivatives participants are paying to remain long rather than paying to remain short. Exchange Netflow shows that ETH continues to move away from exchanges, meaning the coin is moving into self-custody rather than the sell side.
Given all the traditional bullish signals, Ethereum should not be trading where it currently is. The asset fell from about $2,375 on May 11 to about $2,031 on May 23. The 14% decline occurred while all internal market indicators were pointing in the opposite direction.
XWIN Research Japan’s analysis identifies a power that explains the contradiction, but it is not found in any of the strength indicators.
Hidden sellers, macro headwinds, and a market that looks strong but keeps falling
The XWIN Research Japan report pinpoints the mechanism behind the discrepancy. Hidden liquidity structurally explains how positive CVD, positive financing, and currency outflows can coexist with price declines. A large number of sell orders placed by market makers and whales are not reflected in the indicators monitored by retail participants, but are recorded in the order book while absorbing aggressive buys.
The surface signal looks bullish because the buyers are indeed present. Prices are lower because sellers are larger, more patient, and invisible to traditional flow analysis.
Ethereum Market Structure Analysis | Source: XWIN Research Japan
The macro environment further increases structural pressures. Although the CLARITY Act initially improved sentiment towards digital assets, the market quickly refocused on the inflation risks and high long-term interest rate environment that continues to define Federal Reserve policy. For a high-beta asset like Ethereum (which amplifies both upside and downside movements relative to broader risk sentiment), this macro backdrop remains a persistent headwind that no amount of on-chain improvements can fully neutralize as long as it persists.
Derived image adds the last layer. A healthy bullish trend requires increased open interest, stable funding, and extended long positions at the same time. What current data shows instead is short covering and deleveraging, which is driving the recent price rebound. This is a mechanical move rather than a true return of demand to build new directional exposure.
Technically, Ethereum is approaching support zones around $1,984 and $1,937. This level is identified in the report as potentially significant if macro conditions stabilize and actual spot demand returns. At such prices, the asset could eventually be considered truly undervalued relative to the network’s fundamentals. Whether a revaluation occurs before deeper level testing depends entirely on whether hidden selling pressure dries up before technical support ends.
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