Ethereum (ETH) is showing renewed bullish momentum as institutional investors increase exposure to the world’s second-largest cryptocurrency.
Analysts say the recent pullback below $4,000 could be the final correction before ETH begins a multi-month rally toward $7,000, signaling a potential breakout for Ethereum in 2025
Analysts See the Pullback as a Setup for a Multi-Month Rally
Market sentiment on social media reflects renewed optimism. Popular crypto analyst Mike Investing (@MrMikeInvesting) wrote, X: “$ETH had its final hard pullback below $4,000 before it begins its multi-month incoming rally. During the recent pullback, institutions like BitMine, BlackRock, and Vanguard all collectively loaded billions in $ETH. $7,000+ by May 2026. Mark my words…”
Ethereum dips below $4,000 as institutions load billions, setting the stage for a $7,000 rally. Source: @MrMikeInvesting via X
While the claim that billions were collectively purchased may be overstated, the data does align with the broader narrative of institutional accumulation and improving investor confidence.
Short Squeeze Risks Could Accelerate the Upside
Market data also shows a potential short squeeze setup forming around Ethereum’s current range. According to analyst @TedPillows, nearly $9.5 billion in short positions would be liquidated if ETH rallies 20%, while only $2.6 billion in longs would be at risk if the price declines by the same margin. This imbalance suggests the market’s “max pain” level is tilted to the upside—a dynamic that could amplify any sudden bullish breakout.
Ethereum’s $9.5B short positions could liquidate if the price rises, while $2.62B in longs risk losses, highlighting upside max pain. Source: @TedPillows via X
At the same time, on-chain liquidation maps show that the heaviest short exposure sits between $4,800 and $5,000, reinforcing the idea that a sharp move above those levels could trigger cascading liquidations and push ETH even higher.
Short-Term Resistance and Technical Patterns
Despite the bullish macro backdrop, traders are still monitoring short-term signals for potential retracements. Technical analyst @SailorManCrypto highlighted a possible 3-drive pattern with bearish divergence on Ethereum’s 30-minute chart. “Currently forming a 3-drive pattern with bearish divergence, a short would be triggered if price deviates back inside the range and aims at filling that FVG near $3,900–$4,000,” he noted.
ETH 30-min chart shows a potential short setup with key levels for retest. Source: @SailorManCrypto via X
This suggests that Ethereum could temporarily revisit key demand zones before resuming its broader uptrend, a view echoed by several short-term traders who see the $3,900–$4,000 area as a critical pivot point.
Why the $7,000 Target Holds Weight
Ethereum’s fundamentals continue to support the bullish outlook. The ETH staking ratio has climbed steadily, removing a growing portion of supply from exchanges and tightening market liquidity. Combined with consistent ETH ETF inflows and expanding institutional participation, the conditions appear favorable for higher valuations in the coming quarters.
If current trends hold, analysts expect Ethereum’s next major resistance zone to form around $5,700, followed by an extension toward the $7,000 psychological barrier.
Looking Ahead: Consolidation Before Expansion
Ethereum’s price has stabilized above $4,100, posting a 7.8% daily gain with a 24-hour trading volume of $59.2 billion, according to Brave New Coin data. While short-term volatility remains a factor, the broader market tone leans bullish as institutional players accumulate and liquidity pressures shift in favor of the bulls.
Ethereum (ETH) was trading at around $4,107, up 7.82% in the last 24 hours at press time. Source: Ethereum Price via Brave New Coin
If Ethereum maintains its footing above $4,000 and on-chain metrics continue to support accumulation, the path toward a multi-month rally could remain intact—aligning with projections of a $7,000 Ethereum by mid-2026.