Fundstrat Analyst Predicts Ethereum to Hit $5,500 Despite Crash

Fundstrat’s Senior Technical Strategist Mark Newton thinks Ethereum (ETH) is ready for a big comeback. He says the recent market swings could be a sign of a new rally ahead. In an analysis shared on X, Newton predicted that Ethereum will soon rally to fresh all-time highs above $5,000, with a possible target of $5,500.

Market Crash Pushes ETH Below Key Support

In the analysis, Newton noted that ETH’s sharp decline below $4,000 mark marks the final stage of its short-term pullback. He expects the altcoin to bottom out within one to two days before beginning a sustained rally. 

He noted that Ethereum’s recent price action shows a minor three-wave correction. According to him, this pattern follows the strong rally between September 25 and October 7 and has likely run its course. 

Ethereum’s recent decline came as part of a broader market sell-off triggered by U.S. President Donald Trump’s announcement of a 100% tariff on China. 

Tom Lee Says Market Pullback Was Overdue

The news shook markets worldwide, causing traders to quickly sell risky assets, including cryptocurrencies. Before the crash, Newton had projected that Ethereum would find support around $4,200 to $4,220. He considered this range ideal for a rebound. 

However, the intensity of the sell-off pushed ETH even lower, briefly dipping to around $3,400. Despite the drop, Newton insists that this correction phase is temporary and that Ethereum remains technically strong enough to recover and possibly climb toward new record highs of $12,000. 

Speaking in a CNBC interview, Fundstrat’s co-founder and BitMine Chairman Tom Lee explained that the market’s correction was “overdue” following months of gains. He pointed out that since the April lows during the tariff period, the broader market had risen by about 36%, signaling stretched valuations.

Although Lee’s comments mainly referred to the stock market, the crypto sector mirrored similar trends. Ethereum had more than doubled in price, briefly hitting new highs before the recent pullback.

BitMine Doubles Down on Ethereum

Despite facing losses from the crash, BitMine, the Ethereum-focused treasury firm led by Tom Lee, appears undeterred. On-chain data from Onchain Lens shows that three wallets linked to BitMine recently withdrew 78,824 ETH, worth approximately $302 million, from the Kraken exchange.

The firm now holds more than 2% of all Ethereum, making it the biggest public holder of ETH. Even with about $1.9 billion in paper losses, BitMine’s recent actions show it still believes in Ethereum’s long-term future.

With both Newton and Lee staying positive, many investors are closely watching what happens next. If Newton is right, the current drop could mark the start of a strong comeback that might push ETH to new highs above $5,500 in the coming weeks.