Ethereum is holding firm despite Bitcoin’s retreat, with analysts pointing to supportive market conditions this week that could accelerate its climb toward $5,000.

While altcoins fumbled amid Bitcoin’s correction to $117,000 on Monday, Ethereum went against the tide, rallying nearly 3% from Tuesday’s low of $3,716. The move pushes the second-largest token closer to the $4,000 psychological level for the fourth time since March 2024.

Several bullish fundamentals are now at play, Decrypt was told.

These include the possible approval for staking within U.S. spot Ethereum ETFs, outsized inflows into existing funds, and increasing acquisition of Ethereum by digital asset treasuries.

The regulatory tone under President Donald Trump is beginning to shift, as the SEC—once firm in its view that crypto staking services violated securities laws—now appears more open.

Sean Dawson, head of research at options platform Derive, previously told Decrypt that he expects a new all-time high by Christmas this year.



Despite the prevailing optimism, Daniel Liu, CEO of Republic Technologies, told Decrypt early Wednesday that it is “unclear which retest will lead to a clean break above $4,000.”

The “leveraged demand around $3,500” and “clear supply around $4,000” could lead to a “range-bound movement in the near term.”

However, Liu also highlights that despite the short-term uncertainty, conditions are primed for a "short squeeze." A combination of "favorable macroeconomic headlines" could tip the balance, catalyzing a sharp move that could push "Ethereum past $5,000 in the coming month." 

Those catalysts include whether the Federal Reserve decides to hold rates steady on Wednesday and a continuation of broader market fervor for risk assets, led by U.S. tech stocks and sentiment in the AI sector, which has seen valuations soar.

U.S. spot Ethereum ETFs, meanwhile, have logged 18 straight days of inflows totaling $5.51 billion since July 3, in what some say are further signs of institutional interest in the second-largest cryptocurrency.

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