Analyst: ETH Could Rally to $4,100 After Short-Term Pullback

Ethereum has shown early signs of outperforming Bitcoin in 2026, with Standard Chartered analysts forecasting renewed strength in the second-largest cryptocurrency. The Ethereum-Bitcoin price ratio has fallen to 0.03, well below the 0.08 high seen in 2021. Analysts expect this metric to gradually return to previous levels as Ethereum's fundamentals improve relative to Bitcoin.

Standard Chartered's Geoffrey Kendrick highlights Ethereum's role in tokenization and stablecoin ecosystems as a key differentiator. With over $10 billion in tokenized assets and the majority of stablecoins hosted on Ethereum, the platform is well-positioned to benefit from growing interest in onchain finance.

The Ethereum-Bitcoin ratio has followed a pattern similar to the 2019 market cycle after hitting a bottom in April 2025. Analysts point to increased stablecoin supply, tokenized real-world assets, and higher developer activity on the Ethereum network as bullish indicators. Ethereum's dominance in the stablecoin space has risen, with Tether's USDT accounting for roughly 52% of the $163.9 billion stablecoin market cap on Ethereum.

Why Did This Happen?

Ethereum's relative strength against Bitcoin is attributed to several factors. Unlike Bitcoin, Ethereum supports smart contracts and is more adaptable to onchain innovations such as tokenized real-world assets. These capabilities have positioned Ethereum as a preferred platform for financial applications. The Ethereum network also benefits from continued corporate buying by Bitmine Immersion Technologies, which remains active in accumulating ETH despite stalled ETF inflows.

The Ethereum-Bitcoin ratio is influenced by Bitcoin's underperformance. Bitcoin's weaker-than-expected returns have led to downward revisions in Ethereum's absolute price forecasts for 2026–2028. However, in relative terms, Ethereum's prospects have improved, supporting the argument for a gradual return to 2021 highs in the price ratio.

How Did Markets React?

Ethereum's price has remained in a tight trading range, oscillating between the 20- and 50-day exponential moving averages. Technical indicators suggest a possible short-term pullback before a potential rally. The leverage ratio for Ethereum futures remains elevated, historically preceding 10% to 25% rallies after brief corrections.

Retail and US selling pressure have offset some of the bullish momentum seen in the derivatives market. Ethereum's price has struggled to break above the 50-day EMA of $3,130. A firm move above this level could test the $3,260 resistance, while a breakdown below the 20-day EMA may see support near $2,900 .

What Are Analysts Watching Next?

Analysts are monitoring the potential impact of regulatory developments, particularly the U.S. CLARITY Act. If passed, the bill could provide a clearer regulatory framework for digital assets, potentially unlocking the next phase of decentralized finance growth. The bill is set to be reviewed by the Senate on January 15, 2026.

Technical indicators and market sentiment also remain key watchpoints. Ethereum's recent price movements show a shift in buying patterns, with spot investors and US-based ETFs driving much of the demand. The estimated leverage ratio for Ethereum has declined, suggesting a more spot-driven market.

Ethereum's ability to increase its layer-one throughput by 10 times over the next few years is another critical factor. Recent upgrades have already improved the network's capacity, and higher throughput is seen as a driver of higher market capitalization.

Investors are advised to keep a close eye on Ethereum's price action around key technical levels. A successful breakout above the 50-day EMA could signal the start of a new upward trend, while a breakdown would increase the risk of a pullback toward $2,600.

In summary, Ethereum's performance in 2026 has drawn attention from analysts due to its improving fundamentals and broader adoption of onchain finance. While the market remains cautious about short-term volatility, the long-term outlook for Ethereum remains bullish, supported by technological advancements and growing institutional interest.