The second-largest cryptocurrency has fallen sharply in recent weeks. Although it has shown a modest rebound, Ethereum remains deeply negative on a monthly basis.
That decline may be worrying to some, but one well-known analyst argues that current levels could offer an attractive buying opportunity.
Scary or Not?
At the time of writing, ETH trades near $1,670, down about 30% since the beginning of May. This weakness mirrors a broader correction across the crypto market, with several altcoins—such as Bitcoin Cash (BCH), Cardano (ADA), and Internet Computer (ICP)—experiencing even steeper losses.
Still, beneath ETH’s pullback many analysts spot potential upside. Analyst Ali Martinez noted that Ethereum’s MVRV Pricing Band has dropped below 0.8. A reading this low generally indicates that a large share of holders are currently underwater on their positions and has often coincided with market bottoms. Martinez described the zone as a high-probability accumulation area and a classic “buy-the-dip” setup. He also highlighted that the TD Sequential indicator recently flashed a buy signal for ETH.
Other technical and on-chain signals also support a rebound scenario. For example, the amount of ETH held on centralized exchanges has declined, reducing immediate selling pressure. On June 9, exchange reserves fell to a monthly low of roughly 14.5 million tokens, reflecting a shift toward self-custody and less readily available supply for sale.
Ethereum’s Relative Strength Index (RSI) is another technical metric suggesting a short-term recovery is possible. The RSI currently sits below 30, which is typically considered oversold. Because the RSI ranges from 0 to 100, readings under 30 often precede short-term bounces, while values above 70 suggest overbought conditions and potential pullbacks.
Tread Carefully
Despite these bullish indicators, several analysts warn that further downside remains possible. One commentator on X, Ted, highlighted the $1,700 level as a key resistance zone. He noted that if ETH fails to reclaim that level, a drop toward $1,400 could occur.
Another concern is waning institutional demand. Even though ETH saw a green 24-hour candle, spot ETH exchange-traded funds have seen significant outflows in recent weeks. Reduced participation from pension funds, hedge funds and other institutional investors has led issuers of spot ETH ETFs—including major financial firms—to sell underlying ETH, adding downward pressure to the market.
In short, while several on-chain metrics and technical indicators point to a potential short-term rebound and an attractive accumulation range, substantial risks still exist. Traders and investors should weigh bullish signals against the chance of deeper losses and consider appropriate risk management before taking positions.