Ethereum is facing growing bearish pressure as weak price action and slowing network growth continue to shake investor confidence. Retail sentiment around ETH has also turned negative in recent weeks, despite Ethereum maintaining its position as the second largest cryptocurrency by market capitalization.
According to analytics firm Santiment, Ethereum’s market cap has declined by 11.6% over the past 15 days, putting the asset at risk of falling below the $2,000 level for the first time since late March. ETF outflows, major wallet exits, and persistent bearish narratives have driven the growing pressure surrounding ETH.
ETF Outflows Deepen Investor Concerns
Spot Ethereum ETFs have continued to record heavy outflows in recent weeks. SoSoValue data indicates that as of May 21, 2026, spot Ethereum ETFs recorded an outflow of $32.58 million. The persistent withdrawals have raised concerns that institutional demand for ETH may be weakening compared to Bitcoin.
According to Santiment, several Ethereum ETF products have experienced persistent outflows throughout May, including particularly large exits from BlackRock-related funds. The analytics firm noted that while a $50 million net inflow day was previously common for Ethereum ETFs, the market has now gone three weeks without surpassing that level.
Market analysts believe the lack of strong inflows has reduced bullish momentum around Ethereum. Many traders expected ETF products to attract fresh capital into ETH, but the recent trend has disappointed investors.
Bearish Sentiment and Weak Confidence Weigh on Ethereum
Ethereum’s on-chain activity has also shown signs of slowing down. Network growth has weakened compared to previous bullish cycles, leading some analysts to question Ethereum’s current momentum.
Santiment noted that ETH’s social dominance continued to rise even as prices declined, indicating that conversations around Ethereum were increasingly driven by fear and frustration. The firm also revealed that Ethereum’s bullish-to-bearish comment ratio on social media dropped sharply throughout May as trader confidence weakened.
Transaction activity across decentralized applications has remained relatively soft despite broader market recovery attempts. Santiment added that while Ethereum still leads the crypto industry in development activity, retail traders have become more focused on short-term price performance. Some traders also believe rising competition from networks like BNB Chain and Solana is putting additional pressure on Ethereum.
Ethereum Foundation Exits and Rumors Add to Fear
Bearish sentiment surrounding Ethereum intensified further after several reports of departures of researchers from the Ethereum Foundation and alleged ETH selloffs surfaced on social media. Many traders viewed the developments as signs of weakening confidence within the ecosystem.
Crypto influencer Wendy O reported in an X post that two Ethereum Foundation researchers have recently left the network amid a mass exodus from the foundation. Reports also circulated claiming that Harvard University sold off its entire $87 million Ethereum stake just one quarter after purchasing it.
At the same time, crypto influencer Kai_xbt circulated claims in an X post alleging that Ethereum bull David Hoffman had sold all his ETH holdings. Reports and rumors surrounding major Ethereum figures have weakened investor confidence and intensified bearish sentiment.
Josiah Oluwadare
