Fundstrats

In brief

• Ethereum sank below $4,350 early Tuesday before gaining ground.
• Fundstrat managing partner Thomas Lee predicted that ETH would not fall below $4,000.
• Lee expects ETH to surpass $5,000 in the near future.

Fundstrat Head of Research Tom Lee predicted that Ethereum would hit a temporary bottom Tuesday before beginning a climb beyond $5,000, shortly before the token began inching upward. 

Citing a message sent to him by Fundstrat Global Head of Technical Strategy Mark Newton, Lee, who also serves as chair of ETH treasury BitMine Immersion, endorsed the view that Ethereum will not fall lower than $4,000 in the near term.

Newtown suggested in his message that the altcoin will “bottom out sometime in (the) next 12 hours near $4,300,” although it was not precisely clear when he sent the message to Lee.

Ethereum currently dipped as low as $4,341 early Monday before rallying to its current level above $4,550. It is down about 1% over the past 24 hours and roughly 8% since reaching an all-time high of $4,946 on Sunday.



A Myriad Linea market found that 80% of the respondents believe that Ethereum will breach $5,000 this year.

(Disclosure: Myriad is a prediction market and engagement platform developed by Dastan, parent company of an editorially independent Decrypt.)

Newton and Lee suggested that the cryptocurrency could climb as high as $5,450, with an accompanying chart indicating that it could return to around $4,800 by the middle of September.

Not everyone agreed that Ethereum will rally in the immediate future, with TradeNation Senior Market Analyst David Morrison telling Decrypt that further declines may be coming in the near term.

“While I would agree that there could certainly be more upside as we head towards year-end, it remains significantly ‘overbought’ when considering its daily MACD [moving average convergence divergence],” he said. “To me, that suggests that it may pull back further from current levels before it can go appreciably higher, or, at the very least, there’s a period of sideways consolidation which could help blow some froth off it, similarly to the major US stock indices.”

Morrison argued that Bitcoin currently looks more attractive in itsupside potential, given that its daily MACD has now returned to neutral levels.

Other analysts also contended that Ethereum’s price could fall further in the near term, including eToro’s Simon Peters.

He told Decrypt, “Seasonality could play a part as September is historically one of the worst performing months for cryptoasset prices and with the price having rallied 250% since April, hitting a new all-time high, and looking a little technically overbought, it may present an opportunity for some long standing holders to realize gains.”

Peters also noted that Ethereum’s path could depend on the U.S. central bank’s decision on interest rates at its next monetary policy meeting on September 16 and 17. 

“If the Federal Reserve holds interest rates at their upcoming meeting in September, where currently the market is suggesting a cut, this may spark a further downside move in the short-term,” he added.

As for the medium term, Peters was confident that Ethereum is positioned nicely for “a strong run” at the end of the year, citing several factors.

“Firstly, the favorable regulatory environment for crypto, particularly in the U.S.,” he said. “This will lead more institutions to build on Ethereum serving as the base layer for stablecoins and real-world asset tokenisation.”

Peters also expects demand for Ethereum to remain strong, both from spot ETFs and  the growing number of public companies who have been steadily accumulating the token in recent months.

“At the same time, interest rates globally are falling and the money supply is going up,” Peters added, suggesting that a growth in disposable liquidity may lead more retail investors towards crypto.

While David Morrison acknowledged ongoing upgrades and institutional interest as factors in Ethereum’s favor, he remains cautious against expecting it to do something spectacular too soon.

“But at current levels, and considering their charts, it looks to me as if Bitcoin has more upside potential over the rest of the year,” he said. “I feel that Ethereum may need to work off existing frothiness before it can find a base from which to launch the next leg of its push higher.”

On the other hand, some analysts actually believe that Bitcoin is a risk for Ethereum in another way, in that BTC’s recent declines could impact ETH negatively.

This is the view of analyst and author Glen Goodman, who tells Decrypt that, while institutional interest in Ethereum ETFs could continue to help the altcoin, Bitcoin could drag down ETH if it continues to fall.

“ETH can probably defy a lackluster BTC, it could rise even while Bitcoin languishes,” he said. “But if BTC seriously nosedives, it’s unlikely ETH will be able to resist the downward pull of a crashing Bitcoin.”

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