Fundstrat analysts predict a short-term drop for ETH to $4,200 with a subsequent rebound to $5,500, indicating an optimal support zone and a technical completion of the correction.
Ether Prepares for a Rupture: Fundstrat Expects a Drop to $4,200 Before Rising to $5,500
Analytical firm Fundstrat Global Advisors predicts that Ethereum (ETH) could temporarily drop to $4,200 before starting a new wave of growth to $5,500.
“I do not attach much importance to the recent weakness in the crypto market and expect ETH to bottom out within 1-2 days, after which it will move up,” said Mark Newton, managing director at Fundstrat.
His comments were shared on Thursday by Tom Lee, chairman of BitMine and an advisor to Fundstrat.
Newton explained that the current decline is a “minimum three-wave correction” that will likely end this weekend.
Optimal support zone
Ethereum has already corrected after the September rally, falling from a high of $4,750 to $4,368.
According to Newton, $4,200 will be a key support zone, after which a recovery is expected.
The crypto asset is trading within a sideways channel that formed after a breakout above $4,000 in August.
“Current drawdowns are strategic accumulation opportunities,” said analyst Benjamin Cohen, adding that “the market will remain volatile until the support band of the bull cycle catches up.”
Macro Factor: Weak US Economy Could Boost ETH
Nasar Ashkar, Chief Strategy Officer at CoinW, said that the weakening US economy and expectations of Fed easing are creating a favorable backdrop for ETH’s rise.
“The expected recovery is driven by the technical structure of the market and the upcoming increase in liquidity,” he stressed.
Institutions Continue Accumulation
Institutional investors remain bullish. Grayscale is actively staking hundreds of millions of dollars in ETH through its new product based on Beacon Chain, according to Arkham Intelligence.
“Ethereum is quietly becoming the foundation of global finance,” said Joseph Shalom, co-CEO of SharpLink Gaming, which owns 838,730 ETH ($3.67 billion).
BitMine, led by Tom Lee, added another 23,823 ETH (about $103 million) to its crypto holdings on Thursday.
Outlook
Analysts agree that ETH’s correction is temporary, and holding the support zone at $4,200 will be the starting point for a new uptrend.
“Ethereum remains the main structural asset of the decade — a level of trust for the new financial system,” Shalom concluded.
Related: Ethereum balance on exchanges drops to 9-year low
