Ethereum market sentiment turned sharply negative in May as traders reacted to continued price weakness, ETF outflows, slower network activity, and recent exits within the Ethereum Foundation.
Data from blockchain analytics platform Santiment showed Ethereum’s market capitalization dropped 11.6% over the past 15 days, increasing concerns that ETH could fall below the $2,000 level for the first time since March if selling pressure continues.
📉 Ethereum sentiment has flipped hard, and retail has jumped from crypto’s #2 market cap quickly. ETF outflows, Foundation exits, slowing network growth, and nonstop bearish narratives have traders questioning $ETH like never before. Here’s our take. 👇https://t.co/RDpVPbdIZs pic.twitter.com/y7JPlcZEPK
— Santiment Intelligence (@SantimentData) May 22, 2026
The report noted that Ethereum’s social dominance increased even as prices declined, a sign that market attention around ETH has grown. However, most discussions across social platforms have shifted toward fear and frustration rather than optimism.
Santiment added that bullish and bearish sentiment around Ethereum is now nearly balanced. In late April, bullish commentary clearly outweighed bearish views, but that gap narrowed significantly through May as trader confidence weakened.
ETF outflows deepen pressure on ETH
Spot Ethereum ETFs remained one of the biggest sources of market pressure during the month. Santiment reported continued outflows from several Ethereum ETF products, including funds linked to BlackRock.
The platform also said Ethereum ETFs failed to record a single inflow day of $50 million or more over the last three weeks, highlighting softer institutional demand for ETH compared with Bitcoin.
Recent market data showed Ethereum ETFs posted more than $340 million in cumulative net outflows across six trading sessions while ETH struggled to reclaim the $2,150 level.
Meanwhile, analysts at JPMorgan Chase said Ethereum demand continues to lag behind Bitcoin. The bank noted that Bitcoin ETFs recovered nearly two-thirds of recent outflows, while Ethereum ETFs recovered only about one-third.
Foundation exits fuel market uncertainty
Changes within the Ethereum Foundation also added to negative sentiment. Recent reports confirmed the departures of Carl Beek and Julian Ma from the Foundation as part of broader internal restructuring efforts.
Santiment said traders reacted quickly to the news, with concerns spreading across the market about weakening long-term confidence in Ethereum. Public claims that some long-term ETH supporters were further reducing exposure added to bearish sentiment, even though several lacked full context.
Despite the market weakness, Santiment noted that Ethereum still leads the crypto sector in overall developer activity. Meanwhile, Ethereum is pushing toward stronger native privacy features as co-founder Vitalik Buterin outlined short-term upgrades designed to improve user protection without major changes to the core protocol.
Network growth slows as traders watch $2,000 support
Ethereum’s network growth has also cooled compared with stronger periods seen in 2024 and early 2025. Santiment reported a decline in daily active addresses and fewer new wallets interacting with the network.
Traders often view slowing wallet activity as a sign of weaker demand for ETH and lower network usage. ETH traded between $2,125 and $2,135 on May 22, keeping the asset close to a key support area watched closely by traders after weeks of outflows and weak momentum.
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