Ethereum Plunges 20% Amid Derivatives Market Dynamics

Ethereum's price has experienced one of its sharpest declines in 2026, dropping over 20% and briefly testing the $1,500 area. This decline may have been driven more by derivatives market dynamics than spot market selling.

On-chain data from CryptoQuant suggests that long liquidations played a significant role in the decline. The ETH Net Taker Volume metric, which measures the difference in volumes between buyers and sellers purchasing ETH perpetuals using market orders, flipped negative on May 11, with seller dominance expanding sharply last week.

A wipeout of leveraged long exposure further pressured already-falling prices. During the early stages of the market decline in mid-May, long traders continued adding leverage, buying the dip and pushing their liquidation price lower. However, with broader market forces pressuring ETH, the top altcoin dipped further toward $1,500, prompting forced long liquidations as traders offloaded collateral in an already weakened market.