Ethereum (ETH) Faces Key Test in May: Can It Hold the Channel or Drop to $1,711?

Ethereum’s past price trends show that May has been its best month historically. Data from CoinGlass confirms that the ETH price delivered an average return of 27.36% in May across multiple years. This is the highest monthly average for Ethereum since its launch. Although not every May ended in gains, the data still shows consistent strength in this period. Market analysts, including Cyclop, cited the trend in May 2025, stating, This statement came as Ethereum entered its sixth month of decline, sparking renewed attention to long-term trend lines. The ETH price pattern for May has gained significance as the token continues to trade below its previous highs. Historical data serves as one of the few available indicators after months of bearish movement. Ethereum (ETH) MVRV Ratio Nears Historical Lows One of the major technical indicators, the Ethereum MVRV (Market Value to Realized Value) ratio, has now reached its lowest level since March 2020, according to Glassnode. The MVRV ratio compares Ethereum’s current market price with the average price at which all ETH was acquired on-chain. A low Ethereum MVRV ratio suggests ETH is undervalued relative to historical buying prices. Michaël van de Poppe, a market analyst, noted that this level has only appeared six times in 10 years. Each time, it was followed by a substantial price shift in the months after. Data from March 2020, the last time the Ethereum MVRV ratio fell this low, shows it happened during the COVID-19 crash. That cycle eventually reversed, but the current MVRV trend is not tied to a single macro event. It reflects broader market cooling and investor hesitation. Ethereum Whales Increase Holdings by Over 22% While the Ethereum (ETH) price declined over five months, large holders—often called Ethereum whales—increased their positions. According to CryptoQuant, accumulation addresses held 15.5356 million ETH on March 10. By May 3, that number rose to 19.0378 million ETH, showing a 22.54% increase. These addresses continued accumulating even while the ETH price fell. Many wallets still reflect unrealized losses, but none of the major Ethereum whales showed signs of mass liquidation. Instead, they added more ETH to their holdings. Carmelo_Alemán, an on-chain analyst, stated, This rise in Ethereum whale activity signals that accumulation patterns have shifted since March. Most large wallets followed a steady buying trend despite short-term volatility in the ETH price. Ethereum Pectra Upgrade Set for May 7 The Ethereum Pectra upgrade is scheduled to activate on May 7, 2025. The upgrade includes EIP-7702, which introduces temporary smart contract functionality for externally owned accounts (EOAs). It supports Ethereum’s account abstraction roadmap without altering the network’s base security features. The Ethereum Pectra upgrade focuses on wallet usability. Developers stated it will help users interact more easily with dApps and manage their accounts with fewer technical barriers. The upgrade targets broader adoption of Ethereum applications. On the same date, May 7, the U.S. Federal Reserve will hold its FOMC meeting to announce the latest interest rate decision. The combination of the Ethereum Pectra upgrade and this macroeconomic event may lead to heightened volatility in the ETH price. While the upgrade is focused on technical enhancements, the market’s reaction will likely depend on execution and macro conditions. Ethereum (ETH) Forms Rising Parallel Channel Pattern On May 7, 2025, Ethereum created a rising parallel channel on the 4-hour chart. A rising parallel channel is a pattern formed by two upward-sloping trendlines where the price moves between them like a staircase. It often indicates temporary upward movement before a possible drop. Ethereum recently tested the lower trendline of the channel, dropping about 3% from the previous level. The price touched the support line and bounced back into the pattern. Now, Ethereum is back inside the rising channel. If the pattern confirms a breakout to the downside, the Ethereum price could fall around 7% from its current level. That would bring it near $1,711, which aligns with a previous support zone marked on the chart. The Relative Strength Index (RSI) is around 56, meaning price momentum is neutral, not overbought or oversold. The chart also shows the 50-period Exponential Moving Average (EMA) near the price. This moving average gives more weight to recent prices and often acts as short-term support or resistance. If Ethereum falls below both the pattern and this EMA, it may signal more selling pressure ahead.