Ethereum (ETH) is trading near $2,100, as a bearish technical setup puts the $1,600 level back into the market’s focus. This milestone is being closely watched after ETH continued to trade below its 200-day EMA, indicating that the medium-term trend remains under pressure.
ETH’s downward pressure also increases the risk of paper losses for Bitmine Immersion Technologies (Bitmine), a company chaired by Tom Lee that holds over 5.28 million ETH. If the downside scenario to $1,600 plays out, Bitmine’s unrealized loss could approach $10 billion, according to data from Dropstab.
ETH’s Bearish Setup Takes Shape
The $1,600 level is drawing attention as one of ETH’s key reaction zones on the weekly chart. In previous cycles, the price has bounced or reversed around this area multiple times, making it a support level worth watching if selling pressure continues to mount. On the daily chart, ETH is currently still trading below its 200-day EMA near $2,530, showing that the medium-term structure has not clearly improved.
ETH daily chart with 200-day EMA. Source: TradingView
According to Cointelegraph, ETH is forming a rising wedge on the daily chart. If the price breaks below the lower boundary of the pattern, the measured move could take ETH back to the $1,600 zone, representing approximately 25% downside from current price levels. Conversely, if ETH bounces and reclaims the $2,530 zone, the technical pressure toward $1,600 will significantly decrease, as this area coincides with the 200-day EMA.
BitMine’s Treasury Bet Comes Under Pressure
For BitMine, ETH’s downward pressure is not just market volatility but a direct risk to a multi-billion-dollar treasury. According to the company’s latest press release, as of May 18, 2026, BitMine holds 5,278,462 ETH, equivalent to about 4.37% of Ethereum’s total circulating supply. The company also announced approximately $685 million in cash and a total value of crypto, cash, and “moonshots” positions at $12.6 billion.
This scale makes Bitmine the largest public company holder of ETH in the market. The company’s “Alchemy of 5%” strategy aims to accumulate up to 5% of ETH’s total supply, directly linking Ether’s price fluctuations to Bitmine’s valuation story and investor confidence.
Tom Lee and Bitmine maintain a long-term view on Ethereum, but the market often reacts faster to unrealized losses when the underlying asset price continues to weaken. When a public company holds over 5 million ETH, a 20%-25% drop in Ether is not just a technical issue on a chart; it can become a factor dominating sentiment around Bitmine’s stock and treasury strategy.
Paper Loss Risk Nears $10B
According to data from Dropstab, Bitmine holds around 5.28 million ETH with an average price of $3,513.57. With ETH around $2,096.95, this treasury is valued at approximately $11.05 billion, while the unrealized profit/loss stands at negative $7.49 billion, representing a loss of over 40%.
BitMine Ethereum Treasury. Source: Dropstab
If ETH drops to the $1,600 zone, Bitmine’s unrealized loss could approach $10 billion, based on the same average price. This figure does not equate to actual losses unless the company sells its ETH, but it could heavily impact sentiment around Bitmine’s treasury strategy. The larger the paper loss, the clearer the pressure from investors against the long-term ETH accumulation thesis.
Staking Revenue Versus Price Volatility
In addition to accumulating ETH, Bitmine also stakes most of its holdings to generate yield. According to the announcement, the company has staked 4,712,917 ETH through MAVAN, with an announced value of about $10.3 billion at $2,191/ETH. The company stated that this staked ETH balance generates annualized staking revenue of approximately $289 million, based on a 7-day average yield of 2.80%.
Staking revenue provides Bitmine with additional cash flow from its own ETH holdings, rather than relying solely on price action. This is also an important part of the long-term vision for a corporate ETH treasury: unlike Bitcoin, ETH can generate yield through staking if operated correctly.
However, staking does not eliminate the biggest risk: ETH’s price remains the deciding factor. When ETH drops hundreds of dollars per token, the market value of the 5+ million ETH held by Bitmine can plummet much faster than the yield generated in a year. Staking revenue is therefore unlikely to be enough to cushion the impact of a deep drop in the spot price.
What to Watch Next
The downside scenario to $1,600 will be harder to unfold if ETH reclaims the 200-day EMA zone and holds above it for multiple consecutive sessions. A clear recovery around $2,500-$2,530 would signal that buying power is returning to a key trend zone, while forcing short-term downside bets to reassess.
On the flip side, a daily or weekly candle close below the nearest support zone will make the $1,600 mark more noteworthy. At that point, traders will not only look at the ETH chart but also monitor BMNR’s reaction, spot ETH ETF inflows, and subsequent treasury updates from Bitmine. The most important thing is whether the company will continue its accumulation pace, slow down purchases, or change its communication with the market as paper losses expand.
