Ethereum (ETH) fell sharply by 7% on Thursday, slipping below the $2,500 mark to trade around $2,420. The decline followed a break below a key technical support pattern known as a rising wedge, raising concerns that prices could fall further toward $2,260.
Meanwhile, Ethereum’s stablecoin ecosystem has seen remarkable growth in 2025. The combined stablecoin transaction volume across Ethereum’s Layer 1 and Layer 2 networks has exceeded $11 trillion this year. This marks a significant increase, with Ethereum’s share of stablecoin activity rising from 40% in 2024 to 60% in 2025, according to crypto exchange CEX.io.
The surge in stablecoin use is partly due to a steep drop in Ethereum’s transaction fees, which fell by over 92% to below 1 gwei in April. This low-fee environment has attracted more stablecoin traders and automated bots. In May alone, bots accounted for 57% of stablecoin volume and conducted 4.84 million transactions, the highest levels recorded on Ethereum.
Ethereum’s native token, Ether, also saw a strong rebound in May, gaining over 40%. Its market capitalization dominance increased from 7.4% to 9.7%. Additionally, US spot Ethereum ETFs have experienced 13 days of consecutive inflows, with $56.98 million added on Wednesday alone.
On the technical front, Ethereum’s price faced resistance at the 200-day Simple Moving Average (SMA) on Wednesday, which has repeatedly capped gains since a 40% rally in early May. The recent price drop below the rising wedge’s lower boundary suggests a bearish trend could continue. If the decline holds, Ethereum might test support levels between $2,260 and $2,110, with the 50-day SMA acting as a possible floor.
For Ethereum to reverse course, it must regain the wedge support and break above the 200-day SMA and key resistance points at $2,750 and $2,850. A sustained move above these levels could trigger a rally toward $3,250. Technical indicators currently show bearish momentum, with the Stochastic Oscillator in oversold territory and the MACD below its neutral line.
