- ETH outperformance in May lifted the DeFi segment to the top-performing sector in May.
- ETH/BTC ratio formed a bullish pattern, suggesting the altcoin may extend its Q2 gains.
In May, Ethereum’s [ETH] remarkable +40% surge lifted DeFi tokens to the top monthly performer by sector.
The DeFi segment posted an average of 14% gain in the past thirty days of trading, followed closely by memecoins at 10%, Velo market data showed.
Source: Velo
Interestingly, it was the first time in over a year that DeFi performed better than the memecoin narrative. Will ETH outperformance extend into June?
Insight from ETH/BTC ratio
One of the barometers for ETH and DeFi market health is the ETH/BTC ratio, which tracks the relative price performance of the altcoin against BTC.
At press time, the indicator formed a bullish inverse head and shoulder pattern, suggesting more upside potential for ETH against BTC, noted analyst BitcoinData21.
Source: BitcoinData21/X
If validated, ETH could outperform BTC by 36% if the ratio rises from 0.02 to 0.03. For context, the May pump and overall DeFi boost happened after the altcoin posted 40% gains over BTC.
A similar positive outlook was shared by crypto options analytics firm Amberdata, citing market positioning and the ETH corporate treasury trend.
“Hearing SharpLink allocate treasury towards ETH ownership is also a strong sentiment signal that supports the ETH rally higher, especially if other corps follow.”
For perspective, SharpLink Gaming announced a $425 million capital raise last week to fund its ETH treasury strategy. Over 20 companies have jumped on the trend, buying over 980K ETH (worth over $2.4B) at press time.
At the same time, selling pressure tapered in May, further supporting the positive prospects for ETH.
Notably, Realized Profit peaked at +$1B during the May pump, nearly rivaling the $1.2B seen last December after ETH tagged $4K.
But profit-taking eased significantly in late May and early June, a trend that could allow the altcoin to rally.
Source: Glassnode
On the price charts, ETH consolidated above the 200-day EMA (Exponential Moving Average, blue) after the May pump.
The altcoin may extend the $2300-$2800 price range in the short term before a strong catalyst determines the next breakout direction.
Source: ETH/USDT, TradingView
That said, renewed macro headlines linked to global tariffs and the Russia-Ukraine war may complicate the bullish outlook. Hence, tracking these macro factors may be crucial for risk management.
