Ethereum dropped 14% between May 11 and May 23, sliding from about $2,375 to $2,031. The move came despite a batch of metrics that normally signal buying pressure — spot order flow is positive, funding rates are above zero, and exchange netflows show ETH leaving exchanges for self-custody. So why the sell-off? A new report from XWIN Research Japan points to what it calls 'Hidden Sellers': large, persistent sell orders placed by market makers and whales that overwhelmed the organic demand.
The hidden sellers theory
XWIN's analysts argue that the price action doesn't match the underlying order book data. Spot Taker CVD — a measure of aggressive buying versus selling — has stayed positive, meaning more buyers are hitting the ask than sellers hitting the bid. Funding rates in perpetual futures remain above zero, which means derivatives traders are paying a premium to stay long. Both are classic signs of a bullish market.
Yet the price kept falling. XWIN attributes the disconnect to large, discreet sell orders executed by institutional players or high-net-worth individuals — the 'hidden sellers' — that absorbed every wave of buying. Unlike a typical distribution pattern, these sellers didn't dump all at once; they fed into the book incrementally, masking the real supply pressure.
Bullish signals that didn't translate
The macro backdrop hasn't helped. Persistent inflation risks and a higher-for-longer interest rate environment hang over risk assets broadly, and crypto hasn't been spared. But internally, the on-chain story looked encouraging. Exchange netflow data shows ETH continuing to move toward self-custody wallets, a pattern often interpreted as reduced selling intent. Combined with positive CVD and elevated funding rates, the setup seemed primed for a breakout — until it wasn't.
XWIN's report suggests the 'hidden sellers' have effectively decoupled price from the spot-flow data that many traders rely on. If that's right, the usual bottom-fishing signals may be less reliable until those large orders clear.
Technical picture after the drop
Ethereum is now trading below its 100-day moving average at $2,250, and the 200-day moving average is trending lower — not a great look for the medium term. The recent bounces from the $2,031 low have been driven mostly by short covering and deleveraging, not fresh demand. That means the rallies lack conviction.
On the downside, two support levels stand out: $1,984 and $1,937. If those fail, there's little in the way of structural support until closer to $1,800. The immediate question is whether the hidden sellers have finished distributing, or whether more supply is waiting above $2,100. XWIN's report didn't offer a timeline, but the data suggests the selling pressure isn't fully spent yet.
