- Ethereum’s volatility shows an immature market adjusting investor expectations during fast re-pricing phases.
- Forced selling may have driven the decline, creating sharper downward pressure toward the $2,500 zone.
- Lee views $2,500 as a buy setup and maintains long-term targets tied to broader tokenization growth.
A sharp decline in Ethereum prices in recent days pushed the asset toward $2,500 during a market pullback as noted by Tom Lee. Lee described the drop as an “engineered washout.” He outlined why he believes the move created what he called a key entry point for long-term buyers.
Lee Describes Market Disconnect and Volatile Trading
Lee addressed the recent price slide by noting that Ethereum and Bitcoin operate as public tokens with valuations shaped by investor perceptions. He stated that neither platform has reached maturity, and he attributed the asset’s volatility to ongoing growth phases.
This explanation linked the recent move under $3,000 to broader re-pricing behavior among investors adjusting future expectations. To build on this, Lee pointed to the steep fall from $4,800 to $2,800 and stated that such swings often reflect rapid shifts in how the market discounts long-term fundamentals.
Observed Selling Pressure
The discussion then turned to observations from Tom DeMark, introduced by Lee as a strategic advisor known for systematic timing work. According to Lee, DeMark identified activity that resembled systematic liquidation.
He suggested that a capital-constrained participant may have been forced to sell as prices fell. This pattern, as described by Lee, created the type of environment where forced selling pressures accelerate downward moves.
Lee added that DeMark’s reviewed downside target hovered near $2,500, a level that became central to their assessment of recent trends.
Target Levels and Long-Range Expectations
As the conversation progressed, Lee stated that reaching the $2,500 area would align with what DeMark described as a buy setup. He explained that this point appears when selling pressure exhausts.
Lee also reiterated his target of $9,000 for Ethereum by January 2026. He linked this expectation to what he called a tokenization supercycle and described stablecoins as approaching a “ChatGPT moment.” He further noted that his long-term $60,000 Ethereum thesis remained unchanged.
