Ether's value decreases, overshadowed by June's subpar performance.
Ethereum Engages in a Three-Day Retreat as Traders Prepare for June's Historically Poor Performance
Ethereum (ETH) has witnessed a three consecutive day decline, marked by a drop to $2,500 - a 9.8% plunge from its peak this month. Despite this downturn, ETH has outperformed numerous altcoins, which have fallen by more than 15% from their own highs this month.
Despite reversing in the past few days, Ethereum has been on a run since April, reaching a high of $3,480 on May 12. June, however, is historically known for being the worst month for the cryptocurrency, with an average monthly return of minus 7.4% since 2016 [5]. This figure rises to a median monthly return of minus 8.68% [5].
The beginning of summer is often linked to the market's sluggish performance in June [5]. Similar trends can be observed in Bitcoin (BTC), with June being its second-worst-performing month, after September, with an average return of minus 0.35% [5].
However, seasonality patterns are not always reliable. For instance, ETH plummeted by 18% in March one year, bucking the four-year trend of gains [5]. It also dropped by 31% in February, after consistently recording positive gains in the past six consecutive years.
Movements in the ETH market might suggest a bargain opportunity. The MVRV ratio, a measure that compares market value and realized value, has dropped to minus 0.074 [5]. A reading below 1 typically signals undervaluation. Additionally, Ethereum whales appear to be purchasing dips, their holdings increasing from 103.45 million ETH to 103.5 million ETH in the past week [5]. Wall Street investors have also continued to accumulate ETH this month, with over $3 billion in inflows to ETFs over the past ten days [5].
Tech AnalysisThe daily charts display a rebound from the $1,385 low hit on April 9, reaching a current price of $2,530 [1][4]. ETH is above the 50-day moving average, forming a potential bullish flag pattern [1]. Comprising a vertical line and a consolidation, this pattern suggests a continuation of the uptrend. Additionally, a cup-and-handle pattern is forming, which, if successful, could lead to a price target of $4,185 [1].
It is essential to monitor upcoming developments in the market, particularly as June progresses, given its historical trends. However, strong bullish sentiment and indications of undervaluation could result in positive price movements, countering the traditional seasonal pattern.
- Traders are preparing for June, a historically poor performing month for Ethereum, which has declined by 9.8% to $2,500 in the past three days.
- Despite the drop, Ethereum has outperformed numerous altcoins, which have fallen by more than 15% from their own highs this month.
- Bitcoin, similarly, has June as its second-worst-performing month, after September, with an average return of minus 0.35%.
- However, the MVRV ratio for Ethereum has dropped to minus 0.074, a reading below 1 typically signaling undervaluation, and Ethereum whales have been buying dips, suggesting a potential bargain opportunity.
- Additionally, Wall Street investors have continued to accumulate Ethereum this month, with over $3 billion in inflows to ETFs over the past ten days.
- Meanwhile, movements in the crypto market should be closely monitored, especially upcoming developments, as June progresses, as historical trends predict poor performance, but strong bullish sentiment could result in price movements countering this pattern.
