Ethereum Surges 13%, Analysts Predict $10K Target

Ethereum’s recent price action represents a significant technical milestone after nearly three years of consolidation. Market analyst Mags highlighted on social media platform X that the cryptocurrency finally broke through the critical $4,000 level on its fourth attempt, following three previous failures to sustain above this psychological barrier. The successful August breakthrough marked the end of a 1,146-day consolidation period, with Ethereum maintaining its position above $4,000 for several months despite a brief dip to $3,800.

The subsequent V-shaped recovery pattern has been identified by technical analysts as particularly bullish for the leading altcoin. According to Mags, this pattern suggests the next upward leg could target $7,331, which aligns with the 1.618 Fibonacci extension level. This technical projection represents a potential new record price for ETH, significantly exceeding its previous all-time highs and signaling renewed confidence in the cryptocurrency’s long-term trajectory.

Beyond technical factors, macroeconomic conditions are creating a favorable environment for Ethereum’s continued appreciation. Analysts at CryptoQuant note that the US M2 money supply has entered a renewed expansion phase, reaching a record high of approximately $22.2 trillion. This monetary expansion typically benefits risk assets, with Bitcoin demonstrating a strong correlation of around 0.9 with M2 growth and surging over 130% since 2022.

However, Ethereum has exhibited what CryptoQuant analysts term ‘liquidity lag,’ rising only about 15% during the same period despite the favorable monetary conditions. This performance gap between Bitcoin and Ethereum has created what analysts see as catch-up potential for the world’s second-largest cryptocurrency. Historical patterns suggest that as Bitcoin’s dominance declines below 60%, capital often rotates into the altcoin market, potentially benefiting Ethereum disproportionately in the coming months.

On-chain metrics indicate a structural shift in Ethereum’s market dynamics that could support higher prices. CryptoQuant data reveals that Ethereum’s exchange reserves have decreased to approximately 16.1 million ETH, representing a drop of more than 25% since 2022. This significant reduction in available supply on exchanges suggests diminished selling pressure, as netflows to exchanges remain consistently negative, indicating ETH is being withdrawn for self-custody rather than immediate liquidation.

Complementing this supply dynamic, the Coinbase Premium Index has turned positive, signaling renewed interest from US institutional investors. This metric, which tracks the price difference between Coinbase and other exchanges, often serves as a proxy for institutional buying activity. The combination of declining exchange reserves and positive institutional sentiment creates a fundamentally bullish backdrop for Ethereum, potentially accelerating its convergence with broader monetary expansion trends.

The convergence of technical breakthroughs, macroeconomic support, and improving fundamentals creates a compelling case for Ethereum’s continued appreciation. CryptoQuant analysts assert that the pattern of capital rotation from Bitcoin to altcoins appears to be re-emerging, suggesting the remainder of the year could see a shift away from a Bitcoin-centric market toward one driven by Ethereum and other altcoins.

If global liquidity continues to expand and the trend of outflows from exchanges persists, the Ethereum price may align more closely with M2 growth, entering a new phase of revaluation. In such a scenario, ETH’s prospect of reaching $10,000 becomes increasingly plausible. The combination of reduced selling pressure, institutional accumulation, and catch-up potential relative to Bitcoin’s performance creates multiple pathways for Ethereum to achieve this milestone, though market participants should remain cognizant of the volatility inherent in cryptocurrency markets.