"Historic May Bull Market Coming" Ethereum Rebound Expected Despite Headwinds

▲ Ethereum (ETH) ©

Despite the thick dark clouds of the macroeconomy and the outflow of institutional funds, altcoin leader Ethereum (ETH) is finding support at key levels and rekindling the flame of a rebound. Amidst major headwinds such as the hawkish stance of the US Federal Reserve and geopolitical risks in the Middle East, market attention is focused on whether the historic bull market of the upcoming May can be replicated once again.

According to investment media FXStreet on May 1 (local time), Ethereum is testing support at the $2,280 level after a 3.5% decline this week. According to SosoValue data, Ethereum spot ETFs recorded an outflow of $183.65 million by Thursday, halting a three-week streak of net inflows. This is attributed to the Federal Reserve reaffirming its hawkish stance by freezing interest rates at 3.50-3.75% and the weakening risk asset investment sentiment due to uncertainties in peace negotiations between the US and Iran.

Even amidst the cooling market sentiment, aggressive corporate accumulation is noticeable. Bitmain Emergent Technologies recently announced that its Ethereum holdings have surpassed 5 million units. Chairman Tom Lee emphasized that the company aims to secure 5% of the total Ethereum supply, demonstrating remarkable speed in accumulating 5 million units in just 10 months, thus revealing strong confidence in the long-term growth of the ecosystem.

Investor sentiment in the derivatives market is sending mixed signals. According to CoinGlass data, Ethereum's long-short ratio recorded 1.03, indicating a slight majority of investors betting on a rise. On the other hand, the weighted funding rate for open interest fell to minus 0.0012%, showing a bearish bias where short positions pay long positions, reflecting the deep deliberation of investors who have not found a clear direction.

Despite the uncertainty, anticipation for the upcoming May remains alive. Ethereum rose 7.3% in April, marking a monthly increase for two consecutive months, and historically, May has recorded a high average return of 28.54%. If institutional fund inflows resume and macroeconomic pressures such as the Middle East crisis subside, there is a strong possibility that a powerful May rally from the past could be replicated.

From a technical analysis perspective, Ethereum is showing precarious support above the 50-day exponential moving average of $2,245 on a daily basis. The Relative Strength Index is hovering around the neutral 50, and the Moving Average Convergence Divergence (MACD) is in negative territory, indicating that a firm upward momentum has not yet been established. To transition to a full-fledged uptrend, it needs to overcome the 100-day exponential moving average at $2,345 and the Fibonacci retracement 38.2% resistance level at $2,367. If the support level breaks, downward pressure could intensify to $2,148.

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