Ethereum price has retraced approximately 10% from the recent all-time high of $4.95K reached in August. Despite the recovery momentum in September bringing the altcoin back near its previous level, the sell-off following the Fed’s rate decision pulled it down to $4.5K. According to analysts, the current ETH level presents a compelling buying opportunity, as they reference the positioning in the Options market and their valuation model. They observed,
“The six-month skew is approaching a flat position (and declining), suggesting near-term event hedging while maintaining a more neutral medium-term outlook—conditions that we believe foster a “buy the dip” scenario.” The recent uptick in the 1-month tenor for the 25 Delta Skew indicates a modest premium for puts compared to calls. However, the 6-month tenor was experiencing a decline, indicating a decrease in demand for bearish bets. This indicated that while there was some caution in the short term, the mid-term outlook heading into Q4 appeared quite optimistic. Additional datasets reinforced the favorable stance. Long-leverage bias persists, yet the market remains far from overheating. At press time, the Open Interest across the Futures market reached unprecedented levels, nearing $30 billion. Furthermore, the Perpetual Funding Rates remained in the positive territory, a situation that analysts noted, “Indicating a long-biased leverage environment that has the potential to drive trend continuation while also heightening liquidation risks in the face of negative catalysts.”
This indicated that ETH was experiencing significant speculative interest—a bullish signal. Additionally, the Funding Rates remained under the 0.04-0.06 thresholds that defined the earlier local peak in 2024 and 2025. The market was not overheated, indicating a less frothy environment that does not warrant concern in the Futures market. Finally, the MVRV Z-score, a valuation model, recorded a reading of 2, contrasting with the 4-7 levels observed during previous cycle peaks. In summary, the altcoin retains potential for growth if historical trends hold true. Duong noted that the recent 25bps Fed rate cut served as yet another catalyst for risk appetite.
On the price charts, ETH has been experiencing a tight consolidation between $5K and $4K. The compression channel may serve as a launchpad for reaching the $5.5K target if a bullish breakout occurs. Duong cautioned that the substantial volume of ETH poised for unstaking could create mid-term selling pressure unless it is secured or absorbed by treasury firms.