Ethereum surged to $3.662, marking its highest level since December 2024. The spike in price came amid strong institutional buying and steady demand from market participants focused on spot ETFs. However, analysts caution that the rally could result in a short-term correction.
According to CryptoQuant analyst Crypto Dan, the current momentum in Ethereum resembles behavior typical of an overheated futures market. Still, unlike the peaks in March and November 2024, the current setup doesn’t appear extreme. A short-term drop remains possible, but the analyst believes any correction would likely be shallow and short-lived.
Transition to a Long-Term Uptrend
In Crypto Dan’s view, Ethereum has already reached an undervalued zone. Despite sluggish performance in the first half of the year, the asset has formed a solid bottom. This sets the stage for an acceleration of upward movement in the second half of 2025, particularly if institutional interest continues.
Crypto analyst Rachael Lucas from BTC Markets supports this view, noting that funds are beginning to treat Ethereum as a long-term investment rather than a short-term speculative bet. According to her, institutional investors currently hold around 4% of Ethereum’s total market capitalization.
Strong Resistance Between $3.850 and $4.000
CoinGlass data reveals a major resistance zone forming on the spot market. Sell orders totaling 68,000 ETH - worth approximately $263 million - are concentrated in the $3.850 to $4.000 range. Analysts suggest this "sell wall" could cap further price gains and trigger a temporary pause in the rally.
Altseason Remains Uncertain
With Ethereum gaining ground, discussions of a potential new "altseason" - a period when altcoins outperform Bitcoin - have intensified within the crypto community. The Alt Season Index from CoinMarketCap, as cited by former Binance CEO Changpeng Zhao, has begun to climb, but it has yet to reach a critical threshold. The index currently stands at 52, while a level above 75 is typically considered confirmation of a full-fledged altseason.
Analysts from Santiment warn that widespread anticipation of altcoin gains could lead to increased volatility. Historically, crypto markets tend to post their most significant rallies when investor confidence is still low.
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