Ethereum (ETH) has been declining for five consecutive months. However, it enters May with increased optimism. Historical trends, on-chain data, whale accumulation behavior, and upcoming technological upgrades create a strong foundation for potential price recovery.
Here are four key reasons why analysts believe ETH may recover significantly in May.
Why Ethereum may recover in May 2025
The first reason stems from the historical price dynamics of ETH. Data from CoinGlass shows that May is usually the most successful month for ETH.
Over the years, ETH has shown an average return of 27.36% in May, which is the highest among all months. Although not every May ends with growth, historical trends indicate that this month usually brings positive sentiment and upward momentum for ETH. Given the current conditions, Cyclop expects ETH to maintain its growth this month and reach a target of $2,500.
"May has historically been the best month for ETH. $2,500 by the end of the month," analyst Cyclop predicted.
Another critical factor supporting the bullish forecast is on-chain data, particularly the MVRV ratio (market value to realized value). According to analyst Michaël van de Poppe, the MVRV ratio for ETH is currently the lowest since March 2020, when the COVID-19 pandemic heavily impacted the crypto market. A low MVRV ratio indicates that ETH is undervalued compared to its on-chain value. This signal has appeared only six times in the last ten years, often preceding significant recoveries. The chart also suggests that ETH could experience substantial growth over the next 3 to 12 months.
The third bullish signal is the recent behavior of whales regarding accumulation. According to CryptoQuant, these investors have not abandoned their strategy even as the price of ETH declined, and many accumulation addresses remain at unrealized losses.
Instead, they have increased their ETH holdings.
As of March 10, accumulation addresses held 15.5356 million ETH. By May 3, this number had increased to 19.0378 million ETH — a rise of 22.54%. Finally, the upcoming Pectra Ethereum upgrade, scheduled for May 7, 2025, contributes to optimism in the market. The upgrade aims to improve wallet usability and user experience. This could enhance the adoption of dApps and long-term demand for ETH.
Meanwhile, on May 7, there will also be an FOMC meeting, where the U.S. Federal Reserve will announce its decision regarding the interest rate. If macroeconomic news is favorable, this could boost short-term ETH gains along with other factors.
However, if the news is negative, it could complicate ETH's price dynamics in May.#Write2Earn #BinanceSquare #CryptoQuant #dApps #ETH $ETH