Tom Lee is predicting that Ethereum could rebound from $4,300 after a $200B market crash. Could this recovery be near indeed?
The crypto market lost over $200 billion in a severe correction, which pulled Bitcoin and Ethereum lower than before. Ethereum slid toward $4,300, leaving traders nursing blood-red bags.
Despite this, Fundstrat Global Advisors co-founder Tom Lee believes Ethereum's price could bottom within hours before bouncing back.
At the time of his prediction, ETH was trading around $4,413 after briefly recovering from $4,313.
Fundstrat's head of technical strategy, Mark Newton, shares the same outlook as Lee. Newton says Ethereum's setup now offers one of the strongest risk-to-reward opportunities.
He believes ETH is unlikely to fall below $4,067, and if it holds that level, the bullish outlook remains intact.
"ETH looks like a great risk/reward right now," Newton explained. He added that Ethereum could soon rally back toward the $5,100 - $5,450 range if support holds near $4,300.
Some traders have also pointed to the adjusted chart trends as a stronger structure. For example, one quant model indicated that Ethereum may not retest lower support levels, which has further lent strength to the optimism.
Institutional activity has added fresh confidence to Ethereum's outlook. BitMine Immersion Technologies, one of the largest ETH holders, purchased 4,871 ETH worth $21.3 million during the dip.
This now brings its total holdings to 1.72 million ETH, which is worth around $7.5 billion.
BitMine now controls nearly 40% of all Ether held in corporate treasuries. In other words, it is now the single largest institutional holder of the asset. According to CoinGecko, this represents about 1.42% of Ethereum's total circulating supply.
The move by BitMine is part of a larger movement from institutions accumulating crypto assets during market downturns. Over the last week alone, BitMine's crypto and cash reserves grew by $2.2 billion. This has boosted its net asset value per share from $22.84 in late July to $39.84.
At the same time, Michael Saylor's company, Strategy, added $357 million worth of Bitcoin to its treasury. This shows that both Bitcoin and Ethereum are attracting more and more long-term institutional buyers even during corrections.
Ethereum's price action currently trades near the $4,407 level, which is the 61.8% retracement support.
This level often acts as a pivot for reversals, and could come into play soon. The Relative Strength Index (RSI) is hovering near 39, which is close to the oversold zone. While bearish strength is still visible, sellers may soon become exhausted if the RSI dips further.
If ETH can hold support at $4,300-$4,407, analysts expect the asset to rebound toward $4,491-$4,550 in the short term. They even expect a possible extension towards $5,100 and beyond.
Ethereum currently trades at about 11% below its all-time high, but signs of strength are starting to show up. Traders and investors should watch out for what happens around $4,300. If ETH can hold above that range, a strong recovery could follow.