Ethereum’s 10% Drop Sparks Bullish Flag Setup as Analysts Eye $7,000 Target

• Ethereum’s pullback sparks bullish flag, analysts anticipate $7,000 breakout.
• Institutional inflows and strong fundamentals reinforce Ethereum’s rally potential.
• Fed rate cut speculation could ignite next Ethereum-led altseason.

Ethereum has shed more than 10 percent in the past week, but analysts see the retreat as a setup for higher prices. The decline has retraced ETH to $4,100, where a powerful support zone has been established following its conversion to resistance. Market observers feel that this correction is healthy and may form the foundation of a new rally.

According to analyst Crypto Rover, Ethereum closed a CME gap between $4,096 and $4,192, a move that strengthens the bullish case. He termed the decline as what he wanted to see next, the leg up. In the short term, ETH has also managed to develop a bullish flag pattern on the four-hour chart. However, traders caution that a continued close below $3,800 would dim the prospects.

Also Read: Massive XRP Dump: 470 Million XRP Sold in 10 Days – What’s Happening?

Breakout Projections Point Toward $7,000

Ethereum’s daily chart indicates strength beyond the short-term pullback. It has already breached a multi-month megaphone formation, which analysts suggest points to the midterm goal of about $7,000 in terms of Elliott Wave and Fibonacci extensions. This target is currently under monitoring, with ETH consolidating.

In addition to the technical patterns, the Ethereum network still leads in adoption. It has almost $87 billion in total value locked and a market of stablecoins worth over $142 billion. These numbers emphasize the unrivaled power of Ethereum in the decentralized financial sphere despite the emergence of new blockchains.

Institutional Flows and Fed Policy Boost

Institutional interest has also played a key role in Ethereum’s resilience. Data shows U.S. spot Ether ETFs have posted consecutive weekly inflows since May, reflecting steady demand. Recently, a report affirmed that Ethereum-related investment products had drawn $2.9 billion in one week alone, which is more than Bitcoin.

Macro factors may further improve this trend. There has been increased pressure to cut the Federal Reserve rate, with President Donald Trump calling on the Fed to cut to boost economic growth.

The move to more accommodative monetary policy is viewed as a potential catalyst for capital to enter risk assets more aggressively, including crypto. Analysts indicate that such a step has the potential to drive the second phase of an altcoin season.

Conclusion

Ethereum’s correction is being viewed as a bullish retest rather than a breakdown. Technicals point toward a possible breakout to $7,000, while fundamentals and institutional flows provide strong backing. If supportive macro conditions emerge, Ethereum may soon attempt a run to fresh highs.

Also Read: Top Cryptocurrencies Chosen by Analysts for 5-Year Holding Strategy

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