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Ethereum drops below $2,000: whales sell ETH while retail keeps buying
Ethereum has fallen below $2,000 for the first time in several months, but retail investors do not appear to be showing much alarm yet.
Judging by market sentiment, many still expect a rebound. Large Ethereum holders, however, have increasingly preferred to reduce positions rather than increase them in recent weeks.
According to analysts, Ethereum has entered a decisive breakout phase of its main technical structure. If selling pressure continues, the next downside target could be the $1,750 area.
As a result, the market is facing an interesting divergence: while whales are taking profits or reducing risk, retail investors continue to count on a price recovery.
Retail investors keep buying the $ETH dip
After Ethereum dropped below the important psychological level of $2,000, social media saw a sharp increase in calls to buy the coin on the decline.
According to analytics platform Santiment, the number of “buy the dip” messages had risen noticeably by Thursday. This suggests that many retail investors still expect a quick rebound and see the current drop as a buying opportunity.
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However, such optimism is not always considered a positive signal. Historically, spikes in interest in buying dips have often appeared during periods when the market had not yet reached a local bottom. Therefore, continued enthusiasm among retail participants may point to the risk of a further decline in the price of $ETH.
Optimism around $ETH rose sharply after the drop below $2,000. Source: Santiment
This suggests that many retail investors still view the current decline as an opportunity to buy $ETH cheaper, rather than as a signal that the fall may continue.
However, history shows that this kind of optimism after sharp drawdowns does not always work in buyers’ favour. Often, the market only finds a bottom after enthusiasm turns into fear and participants begin to capitulate en masse.
Santiment believes a stronger buying signal may appear later.
“There will still be an opportunity to buy Ethereum, but ideally it is worth waiting for the moment when most participants stop giving in to FOMO and start panicking,” Santiment analysts noted.
According to them, the best entry points usually appear precisely when market sentiment becomes extremely negative.
Institutions are selling despite retail optimism
While private investors continue to buy the dip, major market participants are acting differently.
Recently, Harvard University’s investment fund fully closed its Ethereum position worth around $87 million. Bankless co-founder David Hoffman, who had long been one of Ethereum’s best-known supporters, also reported selling his $ETH holdings.
Pressure is also visible from exchange-traded funds. Since May 7, U.S. spot Ethereum ETFs have recorded an almost uninterrupted outflow of capital.
Over the past two weeks, investors have withdrawn more than $470 million from these funds, indicating continued caution among institutional players.
Investors continue to withdraw funds from spot Ethereum ETFs. Source: Glassnode
The largest Ethereum holders are also in no rush to buy the dip.
According to Glassnode, wallets with balances of more than 10,000 $ETH, often classified as mega-whales, continue to reduce their holdings. Since the beginning of 2026, the volume of coins on such addresses has decreased by more than 5%.
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While retail investors are actively buying on the decline, the largest market participants are instead gradually reducing their share in Ethereum. This may indicate that large capital does not yet see convincing signals for a trend reversal.
Ethereum mega-whales continue to reduce their $ETH holdings. Source: Glassnode
Against the backdrop of selling by large holders, the main exception remains BitMine, a company linked to Tom Lee.
The company currently holds around 5.21 million $ETH on its balance sheet, equal to roughly 4.3% of Ethereum’s total supply. Lee previously said BitMine expects to increase this share to 5% of the network over time.
In his view, Ethereum could benefit from the long-term trend of traditional asset tokenization and the spread of AI agents, which will need neutral public blockchains to operate.
For now, however, this bet looks unsuccessful. According to DropStab, BitMine’s average $ETH purchase price is around $3,484 per coin.
At the current price near $1,990, the company’s position remains deeply underwater on paper. Analysts estimate that BitMine’s unrealized loss has already reached about $8 billion.
BitMine’s loss on its Ethereum position exceeds $8 billion. Source: DropStab
Ethereum may retest the low near $1,750
On Thursday, $ETH lost another roughly 3% intraday and fell toward $1,965.
From its 2026 high near $3,400, Ethereum’s price has already fallen by more than 40%.
The latest wave of selling began after the price broke downward from a pattern resembling a rising wedge. In technical analysis, this pattern is usually considered a signal of a possible continuation of the decline.
As long as $ETH remains below key resistance levels, some analysts allow for a retest of the $1,750 area, which has already acted as an important support zone for the market.
Three-day $ETH/USD chart. Source: TradingView
Such patterns usually play out after a break below the lower boundary of the wedge. In this case, the downside target is calculated by the height of the pattern itself and projected downward from the breakout point.
Ethereum broke down from this structure on Saturday and has continued losing ground since then. Against this backdrop, analysts are once again focusing on the $1,750 area, which now looks like the nearest major target for bears.
If this scenario plays out, $ETH would lose another roughly 18.5% from current levels.
See also: "Bitcoin trapped below $74,000 ahead of $9 billion options expiry"
