Ethereum (ETH) has seen a decline in its value over the past five months but is now showing signs of a potential rebound as it enters May with increasing optimism. Analysts highlight several factors that suggest ETH could strengthen significantly in May.

One reason for optimism is ETH's historical performance in May, which has traditionally been its strongest month with an average return of 27.36%. While not every May has resulted in gains, the overall trend indicates positive sentiment and upward momentum for ETH, leading some analysts to predict a target of $2,500 by the end of the month.

Another positive indicator is the current low MVRV ratio for ETH, signaling that the cryptocurrency is undervalued compared to its on-chain value. This rare occurrence has historically preceded major price recoveries, hinting at potential growth for ETH in the coming months.

Additionally, recent data on whale accumulation behavior shows that large investors have been increasing their holdings of ETH despite price drops, showcasing their confidence in the asset and its long-term potential for appreciation. This behavior reflects a strong belief in Ethereum's project and ecosystem.

Furthermore, the upcoming Pectra upgrade scheduled for May 7, 2025, is expected to enhance wallet usability and user experience, potentially driving increased dApp adoption and demand for ETH in the long run. However, the outcome of the FOMC meeting on the same day could also impact ETH's short-term price trajectory depending on the Fed's interest rate decision and macroeconomic news.