Key Takeaways
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Ethereum’s price fell below $2,000 for the first time since March 29.
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Santiment warned that retail “buy the dip” optimism may be a bearish contrarian signal.
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The drop came shortly after Bitmine’s Tom Lee reiterated a bullish “supercycle” view.
Ethereum fell below the $2,000 mark for the first time since late March, underperforming Bitcoin, just days after Bitmine’s Tom Lee reiterated hope for a “supercycle.”
The broader crypto sell-off deepened amid renewed risk aversion and a wave of leveraged liquidations, raising troubling questions about a further decline in digital assets.
‘Buy the Dip’ Optimism May Signal More Downside
Blockchain analytics firm Santiment said Ethereum’s price falling below $2,000 had triggered an unusually optimistic response from retail traders, despite the sharp decline.
“Ethereum has just seen its market value fall below $2,000 for the first time since March 29th,” Santiment Intelligence wrote on Thursday.
The firm said traders generally respond to steep price drops in two ways:
In this case, Santiment said the market was showing the latter reaction.
“Retail has erupted with ‘buy the dip’ calls toward ETH as a result of this drop below a key psychological support level,” Santiment said.
Santiment cautioned that such optimism can be a contrarian signal, because the crowd “usually gets calls wrong.”
It said the price “may have a bit further to fall” if traders remain too eager to buy the decline.
“There will be an opportunity to buy Ethereum, but ideally you will want to wait for the majority to cool down their FOMO and begin to show panic,” Santiment said.
Adding: “This way, you will be buying while there is true blood in the streets.”
Drop Follows Tom Lee’s ‘Supercycle’ Call
The sell-off came days after Bitmine said its crypto, cash, and “moonshots” holdings totaled $12.3 billion, including 5,390,404 ETH.
Bitmine said its Ethereum holdings represented 4.47% of the total ETH supply, making it the largest Ethereum treasury globally.
The company also said it had acquired 111,942 ETH over the previous week.
Lee said he and the firm “continue to expect a supercycle ahead for crypto and Ethereum, driven by the dual drivers of Wall Street tokenization and agentic-AI.”
“And thus, we continue to steadily acquire ETH, with Bitmine now owning nearly 5.4 million ETH tokens,” he added.
The famed Ethereum bull said the recent weakness in ETH was attractive for long-term accumulation.
“We view the recent pullback of ETH to below $2,200 as an attractive opportunity,” Lee said, with the price falling over $200 since his comments.
Lee also noted the company’s annualized staking revenue had reached $276 million.
Can Ethereum Price Drop Further?
Ethereum’s near-term outlook remains closely tied to Bitcoin’s ability to stabilize after the latest risk-off move.
If Bitcoin holds above $73,000, Ethereum could attempt to recover the $2,100 level, according to CoinMarketCap analysis.
However, a failure to defend the recent low near $1,975 could expose Ethereum to further selling pressure.
The speed of the decline has been amplified by liquidations in leveraged long positions, suggesting that traders positioned for a rebound were forced out as prices broke lower.
That has left Ethereum vulnerable to further volatility, especially if Bitcoin continues to weaken.
Lee Says Oil Prices Are Weighing on Ethereum
Lee had earlier argued that Ethereum’s recent weakness was driven by macroeconomic factors and was not a sign of a deterioration in the asset’s long-term prospects.
In a post on X on May 18, Lee said the rise in crude prices had become the main obstacle for Ethereum.
“If one is wondering why Ethereum has been under selling pressure,” Lee wrote, “to me, rising oil prices is the biggest headwind.”
Lee said Ethereum’s inverse correlation with oil prices had reached its “highest ever,” suggesting that the recent climb in energy markets had directly weighed on sentiment toward the token.
He said Ethereum had fallen as oil prices rose over the previous six weeks, but argued that a reversal in oil prices could improve the outlook for ETH.
“These structural drivers are in place,” Lee wrote, referring to tokenization and agentic artificial intelligence. “Thus, we expect ETH prices to be stronger as we move through 2026.”
‘Crypto Spring’ Thesis Faces Fresh Test
Lee’s comments also came shortly after he said the crypto market had emerged from its prolonged downturn, a view now being tested by Ethereum’s slide below $2,000.
“Crypto Spring has commenced,” Lee said in a monthly chairman’s message released with Fundstrat’s latest update.
Lee argued that Ethereum’s recent monthly performance had historically marked a shift away from bear-market conditions.
“There’s never been a crypto winter where Ethereum has closed up three consecutive months in a row,” Lee said.
According to Lee, a May close above $2,100 would strengthen the case for a broader recovery across digital assets.
But Ethereum’s latest drop below $2,000 has put that threshold back in focus, raising doubts over whether the rally can hold without renewed support from Bitcoin.
Ethereum Price Decline Boosts Scrutiny
The latest Ethereum price decline has also sharpened scrutiny of Lee’s bullish calls, particularly after Ethereum failed to hold levels that he had described as attractive for accumulation.
His comments drew criticism from some crypto traders on X.
“It’s looking more and more like you backed an overpriced horse in this race,” one X user wrote.
“This is goodbye for now there is too much opportunity in the market now to keep my wagon attached to this train wreck.”
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