"Historical May Bull Market is Coming" Ethereum Expected to Rebound Despite Headwinds

▲ Ethereum (ETH) ©

Despite the thick dark clouds of the macroeconomy and the outflow of institutional funds, altcoin leader Ethereum (ETH) is finding its footing on key support levels and reigniting the spark of a rebound. Amid major headwinds such as the hawkish stance of the U.S. Federal Reserve and geopolitical risks in the Middle East, market attention is focused on whether the historical bull market of the upcoming May can once again unfold.

According to investment media outlet FXStreet on May 1st (local time), Ethereum is testing support around $2,280 after a 3.5% drop this week. Based on SoSoValue data, Ethereum spot ETFs recorded an an outflow of $183.65 million by Thursday, halting a three-week streak of net inflows. This is attributed to the Fed reaffirming its hawkish stance by freezing interest rates at 3.50-3.75% and the uncertainty of peace negotiations between the U.S. and Iran, which has dampened investment sentiment for risk assets.

Even amidst the cooling market sentiment, aggressive corporate accumulation is notable. Bitmain Emergen 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 and has shown remarkable speed in accumulating 5 million units in just 10 months, demonstrating strong confidence in the long-term growth of the ecosystem.

Investment 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, expectations for the upcoming May remain alive. Ethereum rose 7.3% in April, marking two consecutive months of monthly gains, and historically, May has recorded a high average return of 28.54%. If institutional fund inflows resume and macro pressures such as the Middle East crisis subside, there is a good possibility that the strong May rally of 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 near the neutral level of 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 must overcome the 100-day exponential moving average at $2,345 and the Fibonacci retracement 38.2% resistance level at $2,367. If the support line breaks, downward pressure could intensify to $2,148.

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