Is Ethereum Ready to Bounce Back? Here's Why Analysts Are Turning Bullish in May

After five straight months of sluggish performance, Ethereum might finally be showing signs of life. Several analysts and market watchers are pointing to a combination of technical signals, on-chain activity, and upcoming network improvements that suggest ETH could be on the verge of a strong rebound.

Ethereum has been struggling in recent months, but several analysts believe the lagging cryptocurrency could be due for a rebound in May.

One analyst highlighted the fact that this month has historically delivered some of ETH’s best returns.

Several technical and on-chain signals also suggest that a move in the lagging cryptocurrency could be coming soon.

After five straight months of sluggish performance, Ethereum (ETH) might finally be showing signs of life. Several analysts and market watchers are pointing to a combination of technical signals, on-chain activity, and upcoming network improvements that suggest ETH could be on the verge of a strong rebound.

One of the more compelling reasons for optimism is seasonal.

May has historically been kind to Ethereum. As noted by data from Coinglass, this month has delivered some of ETH’s best returns, with an average gain of over 27%. Of course, past performance doesn’t guarantee future returns, but the timing has traders paying closer attention.

Analyst Cyclop believes this pattern will repeat itself, forecasting that Ethereum could reach the $2,500 mark by month’s end if momentum holds.

Offical: May is the best month for Ethereum. Since 2015, it has delivered an average return of +26.94%.

This May, we might see a repeat of this pattern as on-chain signals and macro trends suggest a potential breakout for ETH.

Could we see $2,500 by month's end?

Let's break it down.

https://t.co/7787888386 pic.twitter.com/3u7E8q7Q8c

— Cyclop (@TheCyclop_) May 4, 2024

On-chain indicators are also flashing green. The MVRV ratio, which compares ETH’s current market price to the average price at which coins last moved, has dropped to levels not seen since the 2020 COVID crash. Historically, dips this deep have preceded major rallies.

One popular crypto analyst, who tracks the metric closely, sees it as a strong signal that ETH is undervalued.

ETH MVRV Ratio reaches lows last seen during the 2020 Covid Crash.

This extreme undervaluation suggests a strong potential for an upcoming market rally.

Will we finally see the long-awaited crypto spring in 2024? Only time will tell.

— Michaël van de Poppe (@CryptoMichNL) May 2, 2024

Meanwhile, whale wallets are growing larger. According to recent data, addresses categorized as long-term accumulators increased their holdings by more than 22% from March to early May.

Despite recent price weakness, these high-stakes holders haven’t flinched—and their conviction may be a key vote of confidence in Ethereum’s future.

In addition to the technical and on-chain signals, Ethereum is also set to receive a major network upgrade with the Pectra update, which is expected on May 7. The update aims to enhance user experience and wallet functionality, a move that could improve dApp usability and attract new users to the ecosystem.

That same day, the Federal Reserve is expected to announce its latest interest rate decision. If the outcome is market-friendly, it could act as a catalyst, adding fuel to Ethereum’s potential breakout.

With historical trends, undervaluation signals, smart money activity, and a major network upgrade all lining up, ETH may be entering one of its most promising stretches in months.

Still, macro headwinds remain in play, and investors are keeping one eye on Washington as they place their bets on crypto’s second-largest asset.