Ethereum Rebounds 20% But Analysts Warn of Ongoing Risks

Ethereum’s recent price action has been nothing short of dramatic, with the cryptocurrency experiencing a significant revival over the past several hours. The asset had crashed below $3,100 on November 5, creating concern among investors about further downside potential. However, the bulls mounted a strong comeback attempt that culminated in a major uptick on November 9, coinciding with former US President Donald Trump’s promise to distribute at least $2,000 to every American outside the high-income bracket.

According to CoinGecko data, ETH rose to as high as $3,650 before slightly retracing to the current $3,610 level. This represents a nearly 20% increase from the local bottom witnessed earlier this month, marking one of the most substantial single-day recoveries in recent Ethereum trading history. The timing of this rally directly correlates with Trump’s stimulus announcement, suggesting that macroeconomic factors continue to play a crucial role in cryptocurrency price movements.

Despite the impressive price pump, several prominent analysts have warned that Ethereum may not be entirely out of the woods yet. X user Posty supports this cautious thesis, arguing that the ‘structure is still in a multi-month downtrend.’ His analysis suggests that multiple key resistance levels in and around $4,000 might prevent a more substantial comeback for the world’s second-largest cryptocurrency.

Posty emphasized the need for clearer bullish confirmation, stating ‘Let’s put in a higher low and higher high if we’re truly ready to run this back.’ This technical perspective highlights the importance of establishing new support and resistance levels to confirm a genuine trend reversal. Another analyst, Ted, outlined a similarly cautious prediction, suggesting that crossing a daily candle above $3,700 could lead to a rally to $4,000, but a rejection at that level may be followed by a drop to the $3,400 support area.

Not all market observers share the pessimistic outlook. Many analysts maintain bullish positions and believe ETH’s valuation could soon reach new historic peaks. X user Cas Abbe suggested that the asset’s plunge towards $3,000 last week appears to be ‘a fakeout,’ comparing it to the dip that occurred in Q2 this year, which was followed by a 100% rally. This historical parallel provides hope for investors looking for sustained upward momentum.

For his part, analyst Ali Martinez envisioned an even more dramatic rise to a fresh all-time high of $10,000. However, his prediction comes with a significant caveat – he assumes the price could first collapse to $2,000 before exploding to that level. This ‘dip before the rip’ scenario represents one of the more extreme forecasts in the current Ethereum analysis landscape, highlighting the wide divergence in expert opinions.

One of the strongest arguments supporting the long-term bullish scenario for Ethereum comes from exchange reserve data. Currently, there are fewer than 16 million ETH tokens stored on cryptocurrency exchanges, which is quite close to the nine-year low witnessed earlier this month. This development suggests that investors have been increasingly shifting towards self-custody methods, reducing the immediate selling pressure on the market.

The declining exchange reserves indicate that holders are moving their assets off trading platforms, potentially for long-term storage or staking purposes. This trend signals confidence among Ethereum investors and suggests there are no immediate signs of mass profit-taking, which could provide fundamental support for continued price appreciation. The movement away from exchanges represents a significant shift in investor behavior that could have lasting implications for Ethereum’s price stability and growth potential.