Ethereum News Today: Regulators and Corporates Fuel ETH's Rally—But Can It Withstand the Correction?

Ethereum’s price briefly surged to a new all-time high of $4,946 on August 25 before retreating, marking a significant correction in the following days. Despite strong momentum and a rally of over 21% from the beginning of the month, ETH has since dropped nearly 5%, settling at approximately $4,713 as of press time. This decline followed a period of heightened volatility and liquidity sweeps, particularly on the daily and 4-hour charts, where bearish divergences in the Relative Strength Index (RSI) signaled potential exhaustion in the upward trend [3].

The surge toward the new high was fueled by multiple factors, including comments from Federal Reserve Chair Jerome Powell that suggested potential interest rate cuts. This triggered a nearly 8% jump in Ethereum’s price within an hour on the preceding Friday, with ETH rising 15% by the end of the day. U.S. spot Ethereum ETFs also played a critical role, attracting over $1 billion in inflows in a single day for the first time since their launch. These funds have outperformed Bitcoin ETFs in recent weeks, reflecting strong institutional demand [2].

Corporate accumulation has further supported Ethereum’s price movement. Several firms, including BitMine Immersion and SharpLink Gaming, have accumulated substantial ETH holdings, valued at over $7 billion and $3.6 billion respectively. This trend, combined with regulatory clarity from the SEC on staking services, has enhanced Ethereum’s appeal to investors. The SEC’s updated guidance allows liquid staking providers to distribute rewards without requiring registration, representing a shift in regulatory approach compared to earlier policies under the Trump administration [2].

However, the recent price action has raised concerns about potential short-term corrections. On-chain data from the Futures Volume Bubble Map indicates overheating in the derivatives market, with speculative activity reaching elevated levels near all-time highs. This aligns with bearish RSI divergences observed on spot charts, suggesting weakening momentum despite higher prices. Historical patterns also point to a potential downturn in September following strong August gains. Since 2016, Ethereum has historically recorded declines in September after posting gains in the previous month [3].

Technical indicators suggest Ethereum remains in an ascending channel on the daily chart, with the price consolidating near the midline. The Supertrend indicator has turned bullish, and the RSI stands at 60, indicating that while upward momentum is still intact, the asset has not yet entered overbought territory. A successful breakout above $5,200, which represents the upper boundary of the channel, could extend the bullish trend. However, a breakdown below the $4,349 level would invalidate the current pattern and increase the likelihood of a deeper correction [3].

In the short term, key support levels include $4,477 and $4,380, with a breakdown below these potentially accelerating downward pressure toward $4,000. On the upside, Ethereum would need to reclaim the $4,800 level with strong momentum to invalidate bearish indicators and continue the bullish trajectory. While a new all-time high is still possible, the current technical and on-chain conditions suggest a higher probability of a near-term consolidation or correction [1].

Source: [1] Ethereum Price Analysis: Is ETH About to Break Past $5K After Recent ATH? (https://cryptopotato.com/ethereum-price-analysis-is-eth-about-to-break-past-5k-after-recent-ath/) [2] Ethereum Briefly Touches New High, Nears $5,000 (https://finance.yahoo.com/news/ethereum-jumps-record-price-move-184709473.html) [3] Ethereum Price Down After New All-Time High Above $4,900, Can It Crash? (https://crypto.news/ethereum-price-down-after-new-all-time-high-above-4900-can-it-crash/)