Ethereum (ETH) has recently pulled back from its highs, raising concerns in the market about whether it has peaked. BitMine Chairman Tom Lee reassured a large number of ETH holders at 2 AM Eastern Time, stating that the coin price is undergoing a healthy slight correction, and after looking down at $4,100, it is expected to challenge the new high of $5,100.
ETH has pulled back to a key range, Tom Lee: healthy correction.
ETH bull Tom Lee quoted Bloomberg analyst Mark Newton, pointing out that ETH is currently in a slight correction phase, expected to retest the range of $4,075 to $4,150, and emphasized that this pullback is healthy.
Image source: X/@fundstrat
He also pointed out that the inventory of ETH on centralized exchanges (CEX) has fallen to a nine-year low; the last time this happened, ETH soared from $30 to $1,500.
Mark Newton wrote that this consolidation phase will likely last another 1 to 2 days, but the pullback zones around this week are the best entry points, with potential to surge towards $5,100 and set new highs. As for Bitcoin (BTC), as long as it doesn't drop below $111.9k, there is still a chance to challenge $130k to $140k.
There is no need to panic about the unlocking of staking; the fundamentals of ETH remain strong.
The reason for this decline is widely attributed to the recent ETH unstaking event, where a large number of stakers are queuing to exit, which could create potential selling pressure. Currently, about 910,000 ETH are in the queue.
On-chain observer Sam pointed out that there has indeed been a daily average net outflow of about 600,000 ETH recently, but the market has overlooked the scale of the 'queued entry' for unstaking, which continues to approach a one-year high.
Image source: (Chain News)
He also stated that from July 16 to 26, there was a similar net outflow, but ETH rose nearly 20% at that time. In addition, the continued inflow of ETF funds, the $20 billion in waiting funds held by BMNR, and the fact that retail investors and Wall Street have not fully entered the market indicate that ETH's fundamentals remain strong.
Economists are optimistic: rate cuts have not yet been priced in, and the bull market will not end so easily.
Economist Alex Krüger reminded that the market tends to worry excessively about peaks after each high point pullback. However, he believes that the real turning point will be at the September FOMC, and he strongly believes that the Federal Reserve will initiate rate cuts.
I am confident that this cycle is not over, as I expect changes from the Federal Reserve that will bring a more dovish monetary policy, which has not yet been digested by the market; once Trump announces who he will nominate to replace Powell, this will start to be absorbed by the market.
He also added that the current market lacks leverage, and Bitcoin's trend resembles that of stocks, showing low volatility and a slow ascent; therefore, those in need should reduce their positions as needed.
A bull market will not end due to high valuations or excessive expansion; the end of a bull market requires a significant triggering event.
From on-chain data, the market situation shows: the movements of long-term holders are key.
For a long time, the buying power of long-term holders and lending rates have been important indicators to determine whether a trend is reversing or weakening.
CryptoQuant found that short-term holders of BTC are selling at a loss, and if the market can absorb this quickly, it will replicate past rebound trends; otherwise, it may trigger a momentum collapse. Additionally, about $3.8 billion of long-term dormant Bitcoin has been transferred recently, signaling the potential arrival of a market turning point.
Image source: (Chain News)
On-chain researcher @crypto_condom added that stablecoin lending rates are an important tool for observing leverage risks. When rates exceed 10%, it indicates increased risk, and above 15% may signal a peak. Currently, although Aave's mainnet rates are rising, they have not yet reached a dangerous zone.
Is the pullback not the end, but the prelude to the next wave of market movement?
In summary, the current pullback of ETH and BTC has not shaken the bull market structure. The queue for unstaking does not directly constitute a factor for price decline; the continued inflow of ETFs and institutional funds, along with the Federal Reserve's potentially favorable policies and interest rate data that have not yet peaked, all indicate that there is still upward space in the market.
In the market of 2025, investors need more patience than ever, and this pullback seems more like a prelude to the next wave of market movement rather than an endpoint.
This article is reprinted with permission from: (Chain News)
Original title: (Tom Lee comforts ETH holders late at night: looking down at $4,100 and rushing towards $5,100, it is a healthy correction)
Original author: Crumax
'Unstaking triggers panic, Tom Lee: Pullback is just the prelude to the rise, ETH aims for $5,100' was first published in 'Crypto City'
