Ether’s hot summer rally may be taking a pause, but some analysts believe the cryptocurrency’s uptrend looks far from over.
After a sharp run-up that pushed the world’s second-largest crypto token (ETHUSD) to a fresh high earlier this week, ether has seen a modest pullback. Still, bullish analysts expect it to resume climbing soon and extend its outperformance against bitcoin (BTCUSD).
“I think that [the ether rally] was an institutional bid, rather than a speculative one,” said Luke Nolan, senior research associate at CoinShares, a crypto investment firm. Continued institutional inflows, corporate buying and a friendly macroeconomic environment could drive ether’s price to as high as $7,000 by year-end, Nolan added.
Ether traded up 0.9% to about $4,630 Wednesday afternoon, after hitting a record high at $4,955.23 on Sunday, according to FactSet data. It was up 38.5% year to date, rallying 75.9% in the past three months alone.
Part of ether’s recent strength stems from the passage of the Genius Act in July – the first major legislation in the U.S. aimed at regulating stablecoins, cryptocurrencies whose values are tied to a safe-haven asset, often the U.S. dollar DXY. The law is expected to significantly accelerate stablecoin adoption, Nolan noted in a phone interview.
On the structural side, Nolan thinks the new law could pave the way for hundreds of billions of dollars’ worth of new stablecoins to be minted on the Ethereum blockchain, which already hosts $145 billion, or more than half of the stablecoin market by value, according to data from DeFiLlama.
Investor psychology also appears supportive. Ether lagged bitcoin for much of last year through the first half of 2025. Thus, when it finally began to rally this summer, some anticipated its outperformance would last longer, Nolan said. That context makes the latest consolidation look more like a pause than the end of the trend, he added.
Another source of momentum has been coming from corporate treasuries. Following Strategy Inc.’s (MSTR) model, more public companies have raised capital, often through issuing convertible notes, to buy crypto. Such deals especially appeal to arbitrage investors, who could profit from the volatility of a company’s stock tied to bitcoin or ether holdings.
While the investor base for companies holding bitcoin and ether appears similar, “a billion dollars goes a long way in Ethereum, given its smaller market cap and lower liquid supply due to staking and ETH locked in smart contracts,” Nolan noted.
Ether’s market capitalization stood at $560 billion on Wednesday, compared with $2.2 trillion for bitcoin, according to data from CoinMarketCap. Meanwhile, a large portion of ether’s supply is not in circulation, as investors lock up or stake their coins to help secure the Ethereum blockchain and earn rewards. The Bitcoin network is secured differently by miners who solve complicated mathematical puzzles. Some ether are also tied up in applications that are powered by smart contracts, or self-executing programs.
The broader macro backdrop could also support assets perceived as risky, including ether – with traders expecting the Federal Reserve to restart interest-rate cuts in September, Nolan noted.
There also could be other potential regulatory catalysts, according to analysts at QCP Capital. If ether exchange-traded funds that allow staking were to win regulatory approval to become publicly listed later this year, ether could receive another boost, they wrote in a recent note.
Still, doubts remain about how far ether’s rally can go. Pauline Shangett, chief strategy officer at cryptocurrency exchange ChangeNOW, told MarketWatch she expects ether to see more upside, but that it will be difficult for the token to break above $6,000, which remains a strong psychological barrier.
Technical setup
From a technical perspective, ether’s outlook also appears stronger than bitcoin’s, said Tyler Richey, technical analyst and co-editor at Sevens Report. “ETH has hit all-time highs in contrast to BTC’s moderate profit-taking pullback that saw a good amount of technical damage done on the daily chart so far this month,” Richey wrote in emailed comments.
He added that momentum favors ether outperformance, with the ETH/BTC ratio potentially climbing to around 0.066, a level not seen since the summer of 2023. For now, investors should also watch key support levels; a breakdown below 0.03975, or more critically 0.03611, would suggest ether’s rally versus bitcoin may be running out of steam and could be at risk of reversing, according to Richey.
What it means for other altcoins
Ether’s trajectory may shape the outlook for other altcoins – or cryptocurrencies other than bitcoin – as well, according to Arthur Azizov, founder and investor at fintech alliance B2 Ventures.
If ether climbs above $5,000 in September, major altcoins could see gains of 20% to 30% for the month, Azizov said.
However, if ether remains in the $4,400 to $4,900 range, most altcoins may trade sideways, Azizov added. A break below $4,400 could spell trouble, with tokens such as XRP (XRPUSD) and Solana (SOLUSD) potentially dropping 10% to 15% for the month, Azizov noted.
-Frances Yue
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