Ethereum is caught between fear and optimism: it could drop to $2,700 or head toward $8,500. Here’s what’s really happening and what to expect now.
The sell-off in Ethereum was neither a bolt from the blue nor the mere side effect of a hacker attack. The multimillion-dollar breach of Balancer, one of the leading DeFi protocols built on the Ethereum network, certainly intensified the sell-off and triggered panic among traders, but this is not the real cause of the decline.
The drop below $3,600, with an intraday plunge of nearly -9% in early November, is part of a broader environment of market weakness, where confidence is increasingly fragile and volatility has once again dominated trading.
Investor sentiment has changed, and for weeks now, signs have been mounting that something in the AI-driven rally is cracking. Record-high valuations of Big Tech, the selective rise of indices, and the perception of a new bubble have pushed many market participants to reduce risk. And as always, when Wall Street goes on the defensive, the crypto market also comes under pressure.
Ethereum is thus paying the price of a global environment of nervousness and mistrust. This divides analysts: For some, it could fall to $2,700. For others, it could soar to $8,500.
Not just Ethereum under pressure
The blow to the Ethereum ecosystem is not just technical, it’s psychological. Balancer is no ordinary project: it is one of the iconic protocols of DeFi, the flagship project of decentralized finance that promised to eliminate banks. The hacker attack that drained over $100 million in funds has reignited the specter of vulnerability, just as global markets are facing renewed uncertainty.
Making matters worse is a less than favorable macroeconomic environment. Big Tech valuations remain sky-high, but the artificial intelligence rally is showing the first cracks. Investors see similarities to the dot-com bubble: too much capital concentrated in a few stocks and too much expectation surrounding a technology still in its infancy. Meanwhile, the Federal Reserve is dampening hopes for a short-term rate cut, strengthening the dollar and weighing on risk assets such as cryptocurrencies.
In this scenario, Ethereum becomes a mirror of the contradictions of the entire cryptocurrency sector. The Balancer attack acted as a trigger, but the fuel was already there: weeks of profit-taking, liquidations of leveraged positions, and a growing flight to safety.
Why Ethereum can fall 25% or rise 130%
It is in this precarious balance that Ethereum moves like a compressed spring. And that’s why it could fall by 25% or rise by 130%.
The risk of a collapse stems from concrete factors. The $3,000 level is a key support level: if it were to give way, the downside target is around $2,700. The decline in institutional flows, as reported by 10x Research, and the concentration of reserves in a few hands (15 companies control nearly 5 million ETH) amplify the risk of a contagion effect. Added to this is an environment of low liquidity, which can turn a moderate decline into a sell-off in a matter of hours.
But there’s also the other side of the coin. The same on-chain metrics that are causing fear today could be the prelude to a reversal. According to Santiment, the increase in short positions on exchanges creates fertile ground for a "short squeeze," a sudden rebound that forces bears to close at a loss and buy back en masse, fueling the rally. It’s a dynamic well-known to traders: the more fear grows, the more potential energy for a rebound builds.
Furthermore, the network’s fundamentals remain solid. Activity on altcoins in the Ethereum ecosystem (from Arbitrum to Optimism) is increasing, volumes on DeFi platforms have returned to six-month highs, and the amount of ETH staked has exceeded 27% of the total supply. These are all signs of silent accumulation, which have historically anticipated major price movements.
The most optimistic analysts see the resistance at $4,800 as the true turning point. A convincing break of this threshold could trigger the second leg of the rally, with a technical target around $8,500. This is certainly an ambitious projection, but not unrealistic if the market were to re-price Ethereum as the backbone of Web3 and the main alternative to Bitcoin’s dominance.
|DISCLAIMER
The information and considerations contained in this article should not be used as the sole or primary basis for making investment decisions. Readers retain full freedom in their investment decisions and full responsibility for making them, as only they know their risk appetite and time horizon. The information contained in this article is provided for informational purposes only, and its disclosure does not constitute and should not be considered an offer or solicitation to the public.|
Original article published on Money.it Italy 2025-11-06 11:16:29. Original title: Tempesta in arrivo su Ethereum? Può crollare del 25% o salire del 130%
