ETH short-term sharp decline of 1.68%: macro interest rate hike expectations combined with ETF continuous net outflows triggering selling

Between 10:00 and 11:00 (UTC) on May 4, 2026, the ETH price saw a sharp short-term drop. The 1-hour return was -1.68%, and the price pulled back to the 2322.57 to 2369.56 USDT range, with an amplitude of 1.98%, indicating a clear increase in market volatility.

The main driver behind this unusual move was the warming up of expectations for interest rate hikes brought about by the upcoming Federal Reserve meeting. In the late April to early May 2026 period, the market was highly focused on the Federal Reserve meeting. Rising inflation pressures led investors to broadly expect maintaining high interest rates or further rate hikes. Risk assets came under pressure, and cryptocurrencies such as ETH have continued to retrace since late April.

At the same time, internal industry factors created a convergence. First, the ETH spot ETF recorded net outflows for five consecutive months. Investor confidence was insufficient, and short-term funds continued to withdraw, contrasting sharply with the net inflow of 2.12 billion US dollars into BTC ETFs over nearly nine days. Second, although the ETH network Pectra upgrade plan was viewed as a potential positive, concerns about execution risks and delays led some funds to leave early and adopt a wait-and-see stance. Order book data shows that on a major exchange, the sell-side proportion reached 81%, with the number of large sell orders far exceeding the number of buy orders. Selling pressure strengthened significantly, further amplifying short-term selling pressure.

Geopolitical risk also cannot be ignored. The US–Iran nuclear talks have stalled, and the closure of the Strait of Hormuz caused crude oil prices to surge to 104 US dollars per barrel, lowering global risk appetite. Meanwhile, the US government froze Iran-related crypto assets, further intensifying market concerns about regulatory risk.

In the short term, key items to watch include the outcome of the Federal Reserve meeting, changes in ETF fund flows, and the critical support level at 2322 USDT. With macro uncertainty elevated and ETF net outflows continuing, ETH still faces short-term volatility risk. It is recommended to monitor the direction of subsequent macro policies and on-chain capital dynamics.