Last week, our article mentioned the possibility of Ether experiencing a catch-up rally, which could serve as a supplementary signal for the current market rebound peaking. However, Ether’s actual performance was far beyond expectations. In just a few trading days, Ethereum rebounded more than 40% from its recent lows. This short squeeze indicates that the strength or weakness of this asset will impact not only the crypto sector but also confidence across all risk assets. In other words, the current rebound is unlikely to truly end until Ether’s upward momentum stalls.
Given Ethereum’s inherently higher volatility compared to conventional market assets, a 40% single-week surge is rare and typically only seen during bull markets. While short squeezes can occur in bottoming phases as well, the gains usually cap around 20% over the course of several weeks. This time, three consecutive large daily gains have achieved what would normally take three weeks. On the positive side, this shows remarkable strength. But from another perspective, the extremely rapid pace of the rally raises the risk that the rebound could end prematurely.
To determine which scenario will ultimately play out, one only needs to watch this week’s closing price. A clear characteristic is that if, after a strong weekly gain, Ethereum closes higher again the next week, the likelihood of continued upside is high. Conversely, if there is a pullback, the asset may revert to previous weakness or at least consolidate for several weeks before another rally can begin. Beyond general market dynamics, another factor that cannot be overlooked is the possibility of new surprise moves by Trump.
From a broader fundamental and long-term perspective, I still view this rally as a corrective rebound, rather than the start of a new bull market for cryptocurrencies. Whether it’s the considerable uncertainty surrounding a Trump administration, or Ethereum’s stagnant ecosystem, the conditions do not favor a sustained trend reversal. At present, it’s difficult to identify structurally ideal points to open short positions. However, for longer-term investors, after a near 100% rebound from the lows, it is worth considering building a base position. In terms of support and resistance, the 2,850–3,000 zone is an area of heavy turnover between bulls and bears. If this week sees a pullback to around 2,270 followed by another upward move, there is a chance for Ethereum to test the 2,860 level.
Turning to Bitcoin, the outlook differs somewhat. In the medium term, the market still has reason to pursue a new high in the 120,000–130,000 range. However, over the past two weeks, my view has been that a further retest of the lows is needed before any new highs are reached. As a result, I have attempted short positions near the 100,000 level, though I will decisively cut losses if new highs are made. The positive for Bitcoin is that its rise has been relatively gradual. Still, as noted above, if Ether continues to rally strongly, Bitcoin will inevitably be pulled toward new highs. Moreover, the ETH/BTC ratio has rebounded from a low of 0.0178 to 0.024, and will face resistance near the long-term trendline at around 0.0256; this ratio can also be used as a reference for gauging relative strength and turning points between bulls and bears.
In summary, last week’s crypto market rebound saw some subtle changes due to Ether’s unexpectedly strong comeback; nevertheless, this does not alter the long-term approach or the strategy of regular investment. If Ether remains strong this week, it’s best to step aside and wait for a higher, better entry point. If there is a sharp pullback or even a significant retracement, then the restart of the downtrend can be anticipated.
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