Ethereum’s Potential Breakout: What the Indicators Suggest
Ethereum (ETH) has seen an impressive surge of 37.7% over the past month, marking a significant uptick for the second-largest cryptocurrency by market capitalization. Despite this, ETH still lags over 33% behind its peak levels from June 2024. However, a convergence of technical and on-chain indicators reveals that ETH might be on the cusp of a major breakout.
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Ethereum’s Bullish Morning Star Candlestick: A Positive Signal
Earlier today, crypto analyst Merlijn The Trader shared on X a promising development on Ethereum’s monthly chart. According to Merlijn, Ethereum has formed a Morning Star candlestick pattern, which is widely recognized as a robust bullish reversal signal.
The Morning Star pattern typically emerges after a downtrend and indicates a potential shift towards upward momentum. It comprises three candles: a large bearish candle, a smaller candle that reflects indecision, and a strong bullish candle that closes well within the first candle’s body.
Institutional Interest in Ethereum on the Rise
Beyond technical patterns, Ethereum is capturing the attention of institutional investors. A recent report by CoinShares highlighted that global crypto exchange-traded products (ETPs) experienced $286 million in net inflows during the week ending May 30, with Ethereum-based ETPs being a major driver of this trend.
Supporting data from SoSoValue shows that in May 2025 alone, spot Ethereum exchange-traded funds (ETFs) recorded a total net inflow of $564 million, a substantial increase from $66 million in April.
Moreover, an increasing number of entities are actively staking their Ethereum on the network. Crypto analyst Ted Pillows noted in a separate X post that Abraxas Capital recently staked $7.5 million worth of ETH.
Staking Ethereum involves locking up ETH to help secure the network and validate transactions, a fundamental aspect of its proof-of-stake consensus mechanism. Participants are rewarded, typically in ETH, for their role in maintaining network operations.
Holding the Critical Support Level
Veteran crypto analyst Ali Martinez stressed the critical importance of maintaining the $2,550 support level for Ethereum to sustain its bullish momentum. Should this level hold, Martinez anticipates a possible rally towards $2,650.
Echoing this sentiment, fellow analyst Titan of Crypto suggested that Ethereum might be preparing for a run towards $3,800, pointing to a breakout from a bullish flag pattern on the daily chart. The analyst also highlighted that Ethereum is currently trading above its 200-day exponential moving average (EMA), often a sign of continued upward movement.
Supply Dynamics and Current Trading Position
Further reinforcing the bullish outlook, nearly 300,000 ETH was withdrawn from Binance between mid-April and mid-May, potentially contributing to a supply crunch. At the time of writing, Ethereum is priced at $2,538, reflecting a 0.8% increase over the past 24 hours.
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