Ethereum (ETH) is currently the center of attention in the cryptocurrency market, with analysts and traders predicting a potential rally to $5,500. This bullish outlook is driven by several factors, including a decrease in illiquid supply, strong signals from ETH futures, and accumulation by large holders.
Bitcoin whales are shifting their focus towards Ethereum, contributing to the altcoin's rise to new all-time highs. This rotation comes as traders set ambitious price targets, anticipating ETH to reach the $5,200–$5,500 range in the near future. Bitcoin recently touched $117,500 before slightly decreasing, but Ethereum has taken center stage, breaking through $4,600 and maintaining that level.
On-chain data reveals that previously inactive Bitcoin wallets have been reactivated, with whales allocating billions to Ethereum instead of increasing their BTC holdings. One major holder reportedly converted 6,000 BTC (approximately $690 million) into ETH, acquiring over 278,000 ETH at an average price of $4,585. This same wallet still holds over 135,000 ETH, valued at more than $500 million. Analysts describe this buying activity as "relentless," noting that whales continue to accumulate ETH despite its 300% rally over the past four months.
Traders are closely monitoring the weekly close, as a close above $4,600 would signify Ethereum's strongest finish ever and confirm momentum towards the $5,200–$5,500 range within days. Technical analysts also point out that ETH has recently filled a key CME futures gap, rebounding from the same level, further bolstering the bullish outlook.
Popular trader BitBull stated that a strong weekly close above $4,600 would indicate that the current rally is not a "bull trap" and could pave the way for further gains towards the $5,200–$5,500 range in the coming week. This positive sentiment is fueled by aggressive whale activity in Ethereum, which continues to grow despite the coin's significant rally.
Adding to the bullish sentiment, Fundstrat CIO Tom Lee predicts that ETH will rally to $5.5K in anticipation of a year-end target of $12K. He attributes this to positive Wall Street sentiment surrounding Ethereum, particularly following the passing of the GENIUS Act. Another analyst from Fundstrat even predicts a steeper rally, setting the year-end target as high as $15K, drawing parallels to Bitcoin's performance in 2017.
The increased institutional demand is evident as digital-asset treasury companies raise capital specifically for Ethereum purchases. Macroeconomic factors, such as dovish signals from the U.S. Federal Reserve, also contribute to the positive outlook. Federal Reserve Chair Jerome Powell's hint at potential rate cuts in Jackson Hole triggered a price jump and new all-time high for Ethereum.
Arthur Hayes, CIO at Maelstrom, forecasts an even more ambitious rally, suggesting Ethereum could reach between $10,000 and $20,000 before the end of this market cycle. He believes that breaking past the all-time high creates a "gap of air," enabling a sharp upward movement.
Overall, the combination of whale accumulation, strong technical indicators, and increasing ecosystem adoption paints a bullish picture for Ethereum as it moves into the next phase of the cycle. While September has historically brought pullbacks, the current market dynamics suggest that Ethereum may be poised for further gains.
