After breaking its all-time high above $4,900 in late August, Ethereum (ETH) has struggled to maintain momentum, slipping below the $4,000 mark in recent days.
Despite brief rebounds to the $4,700 range, the second-largest cryptocurrency remains volatile, leaving traders wondering whether the next move will be up or down.
But according to Fundstrat Global Advisors analyst Mark Newton, the latest dip may actually be the calm before the next big move. In a note shared by Fundstrat co-founder Tom Lee, Newton argued that Ethereum’s short-term weakness isn’t a sign of reversal, but rather the end of a temporary correction.
“I’m not concerned about the recent pullback,” Newton said. “Ethereum looks set to bottom within the next day or two before resuming its advance toward $5,500.”
Short-Term Pain, Long-Term Setup
Newton’s outlook builds on a technical analysis of Ethereum’s rally that started in late September. He believes the asset has been forming a three-wave corrective pattern, typical in market consolidations that precede fresh uptrends.
After retracing roughly 50% of its gains from the September 25 – October 7 rally, Ethereum has entered what he calls an “ideal support zone” between $4,200 and $4,220. According to his model, that range could provide the foundation for the next leg higher, pushing ETH toward new record territory in the coming weeks.
A Healthy Correction
Analysts at Fundstrat maintain that volatility at this stage is not a sign of weakness but a healthy reset within an ongoing bull market. Newton emphasized that Ethereum’s chart still shows strong upward structure, with buying activity likely to return once prices stabilize.
If his projection proves correct, the cryptocurrency could rebound as soon as mid-October, confirming that the recent market dip was simply a pause in a broader uptrend rather than a trend reversal.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.