Ethereum Market Faces 'Bought but Still Falling' Structure

The Ethereum market has been experiencing a peculiar trend, often referred to as a 'bought but still falling' structure. This phenomenon occurs when market indicators suggest a bullish sentiment, yet the price continues to decline.

Recently, positive news from geopolitical tensions and President Trump's comments on the Strait of Hormuz led to a brief recovery in the crypto market, including Bitcoin and Ethereum. However, this uptick was short-lived, and ETH prices fell from around $2,375 on May 11 to nearly $2,031 on May 23.

Despite the positive indicators such as Spot Taker CVD remaining positive, Funding Rates above zero, and Exchange Netflow showing ETH leaving exchanges, the market's internal structure remains fragile. This suggests that there may be strong hidden selling pressure absorbing demand, making it challenging for the price to recover.

The presence of hidden liquidity is another factor contributing to this situation. Even with aggressive buying, large sell orders from market makers and whales can continue to absorb those purchases, creating a disconnect between the market's appearance and its underlying dynamics.

Macro conditions are also putting pressure on ETH prices. Although the Clarity Act initially improved sentiment, markets quickly shifted focus back toward inflation risks and higher-for-longer interest rates. For high-beta assets like ETH, this remains a major headwind.

Derivatives markets do not confirm a healthy bullish trend, as recent moves appear driven more by short covering and deleveraging than fresh long-term buying. Technically, ETH is approaching important support zones near $1,984 and $1,937, which could potentially serve as undervalued areas if macro conditions stabilize and real spot demand returns.