- The ETH/USD pair has retested a crucial support level around $4.1k following the recent bullish breakout.
- Rising Ether short trades will trigger a major short-squeeze amid strong demand from institutional investors.
- President Donald Trump has championed rate cuts, thus rejuvenating a crypto rebound ahead.
Ethereum (ETH) price has dropped over 10% in the past seven days that analysts see as a textbook bullish setup for a new all-time high. The pullback to the crucial $4,100 support level is not seen as a weakness, instead as a healthy retest of a former resistance zone, a technical pattern that often precedes a major breakout.
The large-cap altcoin, with a fully diluted valuation of about $504 billion, has since closed a CME gap previously formed between $4,096 and $4,192.
Popular analyst Crypto Rover noted this is “exactly what we wanted to see for the next leg up,” suggesting the move has cleared the way for a new rally. This view is supported by the ETH/USD pair forming a bullish flag pattern on the four-hour chart.
For a live trading analysis of ETH short-term levels, you can check our Ethereum (ETH) price prediction for today. A sustained close below the $3,800 support zone, however, would invalidate this bullish outlook.
Why Bet on Ethereum Bullish Breakout Ahead
Favorable Technicals
In addition to a favorable macro technical outlook, the ETH price is well-poised for a bullish breakout bolstered by robust fundamentals.
In the daily timeframe, ETH price has already broken out of a multi-month megaphone structure, which has a midterm target of around $7k based on the 1.618 Fibonacci extension in the Elliott Wave Principle.
Robust Fundamentals
Ethereum’s bullish outlook is bolstered by robust fundamentals, including rising tokenization of real-world assets (RWA) and notable implementation of Ether’s treasury plans.
Despite the significant competition in the altcoin space, the Ethereum network remains the undisputed leader, with a total value locked of about $87 billion and a stablecoin market cap of over $142 billion.
The Ethereum network has also attracted significant capital from institutional investors, especially via the U.S. spot ETH ETFs. According to market aggregate data from SoSoValue, the U.S. spot Ether ETFs have recorded consecutive weekly cash inflows since mid-May to mid-August.
Reinforcing this trend, our report Ethereum (ETH) ETPs See Record $2.9 Billion Weekly Inflow, Dwarfing Bitcoin, confirming that institutional players are aggressively adding ETH exposure.
Altseason Triggered by Possible Fed Rate Cut
A crypto summer akin to the 2017 bubble burst has been forming in the recent past. The 2025 altseason will be triggered by a Fed rate cut as capital flight to the crypto market by institutional investors remains high.
On Tuesday, President Donald Trump urged the Federal Reserve to cut its benchmark interest rate to bolster economic growth. With the ongoing reorganization at the Fed, a potential rate cut in September is likely despite the rising unemployment and inflation.
“Could somebody please inform Jerome “Too Late” Powell that he is hurting the Housing Industry, very badly? People can’t get a mortgage because of him. There is no Inflation, and every sign is pointing to a major Rate Cut,” President Trump noted.
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