Ethereum’s current dip could soon give way to a strong rally, according to Fundstrat Global Advisors’ managing director Mark Newton, who expects Ether (ETH) to bottom near $4,200 before surging toward the $5,500 level in the coming weeks.

In a market note shared by BitMine chairman and Fundstrat adviser Tom Lee on Thursday, Newton said that Ether’s recent decline represents a normal retracement within a broader bullish structure. “I do not make much of crypto weakness in recent days and expect ETH likely bottoms out over the next one to two days before heading back higher,” Newton said, describing the correction as a “minor three-wave pullback” likely to conclude over the weekend.

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Ether has already retraced from its September highs, dropping from around $4,750 earlier this week to briefly below $4,300. Newton views $4,200 as “an optimal area of support,” suggesting that this price zone could serve as a springboard for Ethereum’s next leg upward toward $5,500.

Ether has remained rangebound since August. Source: Tradingview

As of Friday morning, Ether was trading near $4,380 — consolidating within the same range that has defined its price action since breaking above $4,000 in early August.

Analysts see dips as buying opportunities

Technical analysts say the ongoing consolidation is a healthy pause before Ethereum’s next big move. Benjamin Cowen, founder of Into The Cryptoverse, noted that “choppy price action” is likely to continue until the “bull market support band catches up,” which could take several more weeks.

Meanwhile, Nassar Achkar, chief strategy officer at CoinW Exchange, told Cointelegraph that Ethereum’s prospects look increasingly bullish as macroeconomic conditions shift in favor of risk assets. “Ethereum’s

potential to reclaim all-time high price levels is increasing ahead of potential macroeconomic shifts amid a weakening U.S. economy,” Achkar said. He added that near-term pullbacks should be viewed as “strategic accumulation opportunities,” particularly if the Federal Reserve begins easing policy later this quarter.

Institutional appetite for ETH is growing

Institutional activity around Ethereum continues to accelerate, supporting the bullish outlook. Blockchain analytics platform Arkham Intelligence reported that Grayscale has been actively adding and staking ETH for its new staking-enabled exchange-traded products (ETPs), depositing hundreds of millions of dollars’ worth on the Beacon Chain this week.

“Ethereum is quietly becoming the foundation of global finance,” said SharpLink Gaming co-CEO Joseph Chalom, describing the network as “the most important structural opportunity of this decade and the trust layer for the next financial system.” SharpLink currently holds 838,730 ETH — worth roughly $3.67 billion — making it the world’s second-largest Ethereum treasury holder.

Similarly, Tom Lee’s BitMine has continued to expand its ETH reserves, adding 23,823 Ether (about $103 million) on Thursday, according to Arkham data.

Grayscale has been staking thousands of ETH this week. Source: Arkham

With institutional interest climbing and technical charts aligning, Fundstrat’s Newton believes Ethereum’s current retracement could soon transition into a breakout phase — potentially marking the start of its next major rally.