While Ethereum (ETH) has posted impressive gains of 37.7% over the past month, the second-largest cryptocurrency by market capitalization still remains over 33% below its June 2024 levels. However, recent technical and on-chain indicators suggest that ETH may be on the verge of a significant breakout.
In a post on X earlier today, crypto trader Merlijn The Trader highlighted a potentially bullish development on the Ethereum monthly chart. According to Merlijn, ETH has printed a Morning Star candlestick pattern – often regarded as a strong bullish reversal signal.
For the uninitiated, the Morning Star is a bullish reversal pattern that appears after a downtrend, signaling a potential shift to upward momentum. It consists of a large bearish candle, a small candle showing indecision, and a strong bullish candle that closes well into the first candle’s body.
Beyond technical indicators, Ethereum is also seeing growing interest from institutional investors. A recent CoinShares report revealed that global crypto exchange-traded products (ETPs) saw $286 million in net inflows during the week ending May 30. Ethereum-based ETPs were a key contributor to this trend.
Data from SoSoValue further confirms this momentum. In May 2025 alone, spot Ethereum exchange-traded funds (ETFs) recorded total net inflows of $564 million – up sharply from $66 million in April.
In addition, an increasing number of entities continue to stake their ETH on the network. In a separate X post, crypto analyst Ted Pillows outlined how Abraxas Capital had staked ETH worth $7.5 million earlier today.
To recall, Ethereum staking involves locking up ETH to help secure the Ethereum network and validate transactions, a core part of its proof-of-stake consensus mechanism. In return, stakers earn rewards, typically paid out in ETH, for participating in network operations.
Veteran crypto analyst Ali Martinez emphasized the importance of the $2,550 support level, noting that ETH must hold above this threshold to sustain its bullish momentum. If it does, Martinez predicts a possible push toward the $2,650 level.
In line with this sentiment, fellow analyst Titan of Crypto suggested that ETH may be gearing up for a run to $3,800, citing a breakout from a bullish flag pattern on the daily chart. The analyst also pointed out that ETH is currently holding above its 200-day exponential moving average (EMA), which often signals continued upward movement.
Adding to the bullish case, nearly 300,000 ETH left Binance between mid-April and mid-May, potentially contributing to a supply crunch. At the time of writing, ETH is trading at $2,538, up 0.8% in the last 24 hours.
Featured Image from Unsplash.com, charts from X and TradingView.com
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