Ether (ETH), the world's second-largest cryptocurrency, is once again under pressure, with its price sliding to US$2,400 after a strong rally that had pushed it to a weekly high of US$2,700. This decline has been accompanied by a wave of mass liquidations across the crypto market.

According to data from CoinMarketCap on Monday (May 19, 2025), ETH has fallen from US$2,580 to its current value of US$2,392, marking a drop of more than 5% in the past 24 hours. As a result, Ether’s market capitalization also shrank significantly to US$288 million.

Broadly speaking, the crypto market has weakened, with global market capitalization shrinking by approximately 1.40% to US$3.25 trillion. Bitcoin (BTC) dipped slightly by under 1% to US$103,000, while major altcoins like XRP and Solana (SOL) saw corrections of 2.3% and 4.5%, respectively.

Liquidation Surge as the Main Driver

One of the key triggers behind ETH’s price drop was a sudden surge in long position liquidations. CoinGlass data reveals that over the past 24 hours, more than US$263 million (around IDR 4.3 trillion) worth of ETH positions were liquidated, with a major portion—about US$205 million—coming from long positions that bet on price increases.

When traders take high-leverage long positions and prices move against them, exchanges automatically sell off assets to cover the losses. This process causes a chain reaction of forced liquidations, intensifying ETH’s downward spiral.

This deleveraging trend has also been evident across the broader crypto market, with total crypto liquidations reaching US$665 million (roughly IDR 11 trillion), over US$466 million of which came from long positions.

Tied to U.S. Economic Instability

Another contributing factor to the crypto sell-off is the broader global market volatility following Moody’s Ratings downgrade of the United States’ credit rating from Aaa to Aai on May 17, 2025.

The downgrade was attributed to America’s ballooning national debt, now standing at US$36 trillion, continued fiscal deficits, rising interest costs, and insufficient political resolve to rein in government spending.

This downgrade rattled global financial markets, pushing U.S. Treasury yields sharply higher, signaling a growing “risk-off” sentiment among investors who are now avoiding riskier assets like cryptocurrencies.

According to analysts from The Kobeissi Letter, bond yields continued to climb despite recessionary pressure, slowing economic growth, and cooling inflation.

Meanwhile, the U.S. Federal Reserve remains firm in its stance not to lower interest rates in the near term. Based on CME FedWatch projections, markets currently expect only two potential rate cuts throughout 2025.