Ethereum News Today: Ethereum's "Belief Zone" Spark Ignites Debate: Bull Run or Bubble?

Ethereum’s price movement has sparked intense debate among analysts, traders, and on-chain observers following its recent surge above $5,000, marking a new all-time high. The rapid ascent has raised questions about whether the market is entering a sustainable bullish phase or if the correction seen on August 24, 2025, signals a shift in momentum. On that day, Ethereum, along with Bitcoin, experienced a sharp sell-off, with Ethereum dropping more than 8.9% and triggering widespread liquidations in leveraged positions. Analysts attributed the decline to a combination of macroeconomic concerns, profit-taking behavior, and thin weekend liquidity, which is often exploited by large holders to drive aggressive price movements.

On-chain metrics suggest that Ethereum is still in the “belief” phase of its market cycle, a stage historically associated with prolonged bullish trends. The long-term holder (LTH) net unrealized profit/loss (NUPL) indicator has entered the “belief-denial” zone, a signal that has preceded major price rallies in previous cycles. This suggests that ETH is not yet in the euphoric phase, where market peaks typically form. The market value to realized value (MVRV) ratio further supports this view, showing a current reading of 2.08—well below the 3.8 and 6.49 levels recorded in 2021 and 2017, respectively. The lower ratio implies that Ethereum remains undervalued and has room for further appreciation before reaching extreme profit-taking levels.

From a technical perspective, Ethereum’s price action has also validated key bullish patterns. A megaphone chart pattern, forming since December 2023, has been confirmed as the price broke through resistance levels to reach $5,000. Analysts like Jelle and Mickybull Crypto have cited this as a signal that the price could move toward $10,000 and even $12,130, based on the target levels of the pattern. Additionally, Ethereum's weekly and daily charts have shown strength after breaking above a rounded bottom pattern, with the neckline at $4,100 acting as a confirmation of the breakout.

The broader macroeconomic landscape, however, remains uncertain. The U.S. inflation and producer price index (PPI) reports exceeded expectations, fueling fears of a prolonged tightening cycle from the Federal Reserve. These macroeconomic pressures, combined with a slowdown in ETF inflows, contributed to the volatility seen on August 24. Nevertheless, the long-term fundamentals for Ethereum remain robust, with institutional demand through ETFs and treasury allocations continuing to drive adoption. James Butterfill of CoinShares highlighted that Ethereum’s role as a backbone for stablecoin transactions, especially in the context of the proposed GENIUS Act, could further solidify its market position.

Looking ahead, analysts remain divided on Ethereum’s short-term trajectory. While some see a potential for a rebound following the August 24 drop, others caution that regulatory developments and macroeconomic volatility could continue to pose risks. Long-term bullish targets remain intact, with the focus now shifting to whether Ethereum can stabilize above key support levels and maintain its upward momentum. As the market digests the recent volatility, the next critical price level to watch will be the $4,100 neckline of the rounded bottom pattern, which could serve as a psychological benchmark for further gains.

Source:

[1] Ether Price Enters 'Belief Zone' Following $5K All-Time Highs (https://cointelegraph.com/news/20k-eth-price-in-play-ethereum-belief-zone)

[2] Ether, Ethereum's coin, breaks 2021 all-time high (https://www.axios.com/2025/08/24/ether-all-time-high)

[3] Why Crypto Drop Today? The Sunday Liquidation Trap (https://99bitcoins.com/news/bitcoin-btc/why-did-crypto-drop-heres-why-sundays-see-liquidation-hunting/)