Ethereum (ETH) Dips Below $2,600 After Weekend Pump — Yet Bull Narrative Stays Alive

Key Takeaways

• On-chain data shows that ETH’s price dropped below $2,600 but remains in bullish territory.
• The IOMAP reveals significant support near $2,365 with over 2 million holders in profits.
• Ethereum’s bullish technical setup supports a rally toward $3,000 if momentum holds.

Like many other cryptos, Ethereum’s (ETH) price briefly increased on Sunday, May 18, but failed to rise past $2,600. Today, the cryptocurrency’s value is slightly above $2,400 despite speculation that the Ethereum bull run may be over.

However, according to on-chain data, that may not be true. In this analysis, CCN explains why the recent pullback is a temporary setback rather than a return to a bearish phase.

We also reveal the potential price targets ETH could hit as soon as this retracement ends.

Despite the Pullback, Ethereum Recovery Not Done

To begin with, CCN examined the Market Value to Realized Value (MVRV) ratio, which assesses market profitability.

A high MVRV ratio typically signals that a cryptocurrency may be approaching a local top. Conversely, a declining MVRV points to the price entering an accumulation zone, where buying pressure tends to build.

According to Santiment, Ethereum’s attempt to reach $3,000 last week sent the 30-day MVRV ratio to 35.70%. But as of this writing, the same metric has dropped to 6.97%. This decline indicates that the value of unrealized profits has fallen.

Historically, when the metric hits this level, it indicates that ETH’s price is nearing a bottom — the precursor to a rebound. Therefore, this pattern suggests the Ethereum bull run may remain intact if history holds.

This position aligns with recent research from CryptoQuant. According to the on-chain analytics platform, Ethereum’s price is undervalued and could soon begin outperforming Bitcoin (BTC).

“ETH recently entered an extreme undervaluation zone relative to Bitcoin, based on the ETH/BTC MVRV metric, for the first time since 2019. Historically, similar conditions in 2017, 2018, and 2019 were followed by periods where ETH outperformed Bitcoin significantly, signaling strong mean-reversion potential,” The on-chain analytic platform stated on May 16.

Bull Case Intact

Furthermore, another indicator that aligns with this thesis is the In/Out of Money Around Price (IOMAP)—the IOMAP spots support and resistance by measuring the volume of coins in profits and losses.

Typically, larger clusters of coins in profit strengthen support levels. However, heavier resistance is created when more coins are at a loss, making it harder for prices to break higher.

According to IntoTheBlock, Ethereum’s strongest support lies near $2,365, where 2.16 million addresses are holding 63.47 million ETH at unrealized profits. This volume exceeds what was accumulated between $2,407 and $2,765 in unrealized losses.

If this trend holds, it indicates that Ethereum’s bull run remains intact, and a return to $3,000 could still be on the table soon.

ETH Price Analysis: Rebound Close

From a technical point of view, the daily chart shows that ETH experienced a breakout from a descending channel late last month. Fast forward to today, after the recent decline, it has formed a bullish pennant.

The pattern appeared after the recent upswing, followed by a symmetrical triangle as Ethereum’s price consolidated. However, on the same timeframe, the Chaikin Money Flow (CMF) has held its ground above zero.

The CMF remaining in positive territory suggests that traders are still accumulating ETH despite recent market jitters. It is also a key sign that bullish momentum could return.

If this trend continues, ETH’s price could notably increase to $3,073 at the 0.382 Fibonacci level.

If the Ethereum bull run continues from this point, this market value might surge toward $3,500.

On the other hand, if selling pressure outweighs bullish pressure, ETH’s price could slide below $2,000.