In the past 7 days, the price of Ethereum has dropped over 10%, testing the important support area around $4,100. However, analysts do not see this as a sign of weakness, but rather a healthy technical adjustment after the previous strong increase. The $4,100 area, which was a strong resistance in the past, is now a support, and the price returning to test is a classic model before breaking out.
Notably, ETH has also closed the CME gap in the range of $4,096 – $4,192. Analyst Crypto Rover stated: 'This is exactly what we want to see before ETH enters the next upward phase.' In fact, the ETH/USD pair on the 4-hour chart is forming a bullish flag, a continuation pattern. However, the bullish scenario will be invalidated if ETH closes below the support area of $3,800.
Technical Perspective: Medium-Term Target Around $7,000
On the daily chart, ETH has broken out of the multi-month megaphone pattern. According to the Elliott wave principle combined with Fibonacci extension 1.618, the medium-term target of ETH is identified at around $7,000. This further reinforces the expectation that the current correction is just a stepping stone.
Strong Fundamental Base
Not only the technology, Ethereum is also supported by a series of fundamental factors:
Tokenization of real assets (RWA) is increasingly developing, bringing value from the real world onto the blockchain.
The ETH treasury management plan is being implemented, creating new incentives for holding Ether.
Ethereum still leads the DeFi market, with $87 billion in TVL (total value locked) and stablecoin capitalization of over $142 billion.
In addition, institutional money is pouring in strongly. U.S. spot ETH ETFs have recorded continuous net inflows for several weeks from May to August. Recent reports also confirm: Ethereum's ETP products attracted $2.9 billion in just one week, far exceeding Bitcoin – a clear sign that institutions are accelerating their accumulation of ETH.
Fed, Interest Rates, and 'Altseason' 2025
A macro factor that could become a catalyst for the altcoin market is the possibility of the U.S. Federal Reserve (Fed) cutting interest rates. In the context of high inflation and rising unemployment, along with political pressure, the scenario of the Fed lowering interest rates in September is highly anticipated by the market.
President Donald Trump recently publicly called for the Fed to cut interest rates, criticizing Chairman Jerome Powell that the current policy is 'harming the housing industry' and making it difficult for people to obtain mortgages.
If the Fed actually takes action, the flow of money moving out of traditional financial markets in search of higher profits in crypto is a completely feasible scenario. This could trigger Altseason 2025, similar to the 'crypto summer' of 2017, but with a much larger market capitalization.
Conclusion
Ethereum is at a critical moment:
Technically, the pullback to the $4,100 area reinforces the bullish model, with a medium-term target of $7,000.
Fundamentally, ETH leads the DeFi market, stablecoins, and strongly attracts institutional capital.
On a macro level, the Fed's ability to cut interest rates could become a booming catalyst for the entire altcoin market.
Therefore, many analysts believe that ETH is not only preparing for a rebound, but also has the potential to establish a new historical peak in 2025.
