Ethereum at Crucial Inflection Point Ahead of Strong May Performance

Ethereum has been on a steady recovery path since April, posting a 7.3% gain for the month and marking its second consecutive green month. This performance has drawn attention to May, historically one of Ethereum's strongest months.

According to crypto analyst Ali Martinez, Ethereum is currently testing the top of its channel near $2,375. This level has repeatedly acted as strong resistance in previous attempts, leading to a pullback toward lower support levels. However, there's a shift in tone this time as repeated tests tend to weaken resistance.

Market sentiment finds support from institutional activity, with U.S. spot Ethereum ETFs recording $23.5 million in net inflows last week. This suggests growing institutional interest even as price consolidates.

The supply of Ethereum on exchanges has also been decreasing, dropping to around 14.5 million tokens, the lowest level on record. This shrinking supply reduces downward pressure and creates a setup where any strong demand could push prices sharply higher due to thinner liquidity.