Ethereum’s $4K Floor: Why Bulls Are Betting Big on the New Normal

Ethereum isn't just flirting with $4K—it's setting up camp. Traders now treat the level like a psychological bedrock, with options markets pricing in minimal downside below it. The 'merge' upgrades finally delivered scalability, and institutions are gobbling up ETH like it's a blue-chip stock (but with 10x the volatility, because crypto never lets you relax).

DeFi's dirty secret? The '4K baseline' narrative conveniently ignores how leveraged long everyone is. One whale liquidation could turn this party into a fire sale—not that anyone's hedging when moon-math says '$10K EOY.'

Smart contracts now process transactions at half last year's gas costs, and staking yields still beat Treasury bonds. Even Wall Street's dinosaur funds are quietly allocating—though they'll still call it a 'speculative asset' in shareholder letters.

Bottom line: Ethereum's acting like an asset that outgrew crypto's boom-bust cycles. Until it suddenly hasn't.

Novogratz: $4K Is Just the Beginning

Speaking on Ethereum’s recent surge, Mike Novogratz dismissed the idea that $3.9K represents the cycle peak for ETH. Instead, he suggested that the current range of $3,000–$4,000 could be temporary.

“My instinct is that it will be $4K that goes by the end of the year. Not $3K,” Novogratz stated, signaling confidence in Ethereum’s long-term growth trajectory.

This outlook comes as ethereum benefits from lower selling pressure on exchanges and a resurgence in institutional accumulation.

Tom Lee Projects 60% Upside to $5.7K

Wall Street strategist Tom Lee echoed Novogratz’s optimism, pointing to Ethereum’s improving fundamentals and strengthening position relative to Bitcoin. According to Lee, the ETH/BTC ratio has room to recover to last year’s level of 0.05 from its current value NEAR 0.031, which could translate into a 60% upside for ETH, pushing it towards $5,700.

“ETH is a better story today than it was a year ago,” Lee emphasized, referencing growth in Ethereum’s treasury activity and overall demand.

ETF Inflows Hit Record Levels

A major driver of Ethereum’s bullish momentum in 2025 has been a sharp increase in institutional interest, particularly through spot ETH ETFs. In July alone, these products attracted $5.3 billion in inflows, the largest monthly figure since their debut.

Currently, ETFs collectively hold over 5.84 million ETH, underlining significant confidence from financial institutions. This influx of capital is complemented by strategic accumulation by crypto-native treasury firms such as BitMine Immersion Tech, SharpLink Gaming, and The Ethereum Machine. Together, treasury reserves now account for approximately 2.73 million ETH—or 2.26% of the total supply.

Exchange Outflows Signal Strong Accumulation

One of the most notable trends supporting the bullish case is the decline in ETH’s exchange netflow. According to data from CryptoQuant, Ethereum’s exchange outflows recently fell to a two-year low. This means fewer coins are being moved to exchanges for selling, implying sustained accumulation by holders.

Even during the pullback from $3.9K to $3.5K, there was no major spike in ETH deposits to exchanges. In fact, the continued low exchange activity is being interpreted as a signal that investors are holding onto their ETH, expecting higher prices.

This pattern stands in sharp contrast to the behavior seen during previous rallies, where sharp price increases were typically followed by waves of profit-taking and increased exchange activity.

Why Ethereum May Outperform in the Coming Months

Several factors are now aligning to support Ethereum’s potential outperformance through the rest of 2025:

• Stronger ETH/BTC ratio: ETH is slowly regaining strength relative to Bitcoin, a sign that capital could be rotating into altcoins with strong fundamentals.

• Treasury demand: Strategic treasury accumulation by both institutional investors and crypto firms points to long-term belief in Ethereum’s value.

• ETF momentum: Massive inflows into ETH ETFs demonstrate growing trust in Ethereum as a core digital asset, not just a speculative play.

• Low exchange activity: A multi-year low in exchange outflows supports the idea that investors are less interested in selling and more focused on long-term holding.

Risks to Watch

Despite the bullish tone, it’s important to acknowledge that Ethereum’s performance could still face headwinds from broader macroeconomic conditions. Rising interest rates, global regulatory shifts, or unexpected market downturns could interrupt the current momentum.

However, the on-chain data and institutional trends suggest that Ethereum is entering a phase of strong demand and reduced selling pressure—conditions that historically precede major breakouts.

Final Thoughts

Ethereum’s price has come a long way since April, and with key voices like Mike Novogratz and Tom Lee projecting higher targets, the case for a continued rally is gaining traction. With exchange outflows hitting multi-year lows and ETF inflows at record levels, ETH appears well-positioned to flip $4,000 into a solid support level.

If these trends persist, a move toward $5,700 before year-end is no longer a distant possibility—it’s a scenario investors may need to take seriously.