Tom Lee: "Ethereum (ETH) will reach $60,000"...Wall Street 'stirred' by bold forecast

▲ Ethereum (ETH)/AI Generated Image

A groundbreaking forecast has emerged, predicting that Ethereum (ETH) will surge to $60,000 within a few years. This analysis comes from Tom Lee, a prominent market analyst on Wall Street. The diagnosis points to a deepening supply shortage, driven by the depletion of exchange balances and an influx of institutional funds.

Lark Davis, host of the cryptocurrency podcast "The Lark Davis Show," highlighted Tom Lee's forecast and Ethereum's on-chain metrics in an episode on September 26 (local time). Davis relayed Lee's argument that Ethereum could break $3,000 in the short term, surpass $5,000 by year-end, and then climb to $50,000-$60,000 in the long term. He explained that a 10x increase from its current market capitalization of $300 billion would reach $3 trillion, and a 20x increase would hit $6 trillion, surpassing Nvidia (NVDA). While Davis acknowledged that $60,000 is a very large figure and suggested $15,000 as a more reasonable "win zone," he expressed agreement with the explosive potential of a long-term cycle.

On the supply side, an unprecedented phenomenon of locked-up volume has been observed. Currently, the amount of Ethereum remaining on exchanges accounts for only 3.49% of the total supply. Since June, 1.16% of the total circulating supply has moved off exchanges. According to on-chain analytics firm Santiment, approximately 35% of the total supply is locked in staking, driven by the conviction of long-term holders. Additionally, $53 billion worth of assets are locked in decentralized finance (DeFi), causing coins to rapidly disappear from exchange sell order books.

The buying momentum from Wall Street institutional investors has also accelerated. This week, the U.S. Ethereum spot ETF market saw significant net inflows, including $270 million, $162 million, $104 million, and $66 million. Considering that Ethereum's market capitalization is about one-sixth of Bitcoin (BTC), a $270 million daily inflow for Ethereum has an impact comparable to approximately $1.7 billion to $1.8 billion in Bitcoin inflows. ARK Invest chose Ethereum, which hosts $164 billion in stablecoins, over Cardano (ADA) for its venture fund tokenization network. Ondo Finance also deployed over 99% of its BlackRock (BLK)-based products on Ethereum.

From a technical analysis perspective, the key turning point is the $2,800 range. This price level has been a critical supply/demand zone that has determined Ethereum's support and resistance over the past five years. With Bitfinex whale investors recently building large short positions, an analysis suggests that a powerful short squeeze (buying pressure triggered to close or cover short positions) could occur if a weekly close above the $2,800 mark is confirmed. Furthermore, having successfully reclaimed the 200-week moving average, there is a possibility that Ethereum could replicate past surges from previous lows, leading a broader altcoin rally.

Accelerated exchange outflows and structural inflows of institutional capital are fundamentally changing Ethereum's supply and demand environment. Market attention is focused on whether Ethereum, which is testing a breakthrough of the key resistance level of $2,800, can enter a new major uptrend, fueled by a supply shortage.

[Article Key Summary]

-Tom Lee predicted Ethereum would reach $60,000 long-term, while exchange balances plummeted to 3.49%.

-Institutional funds flowed into U.S. Ethereum spot ETFs, with increased adoption by ARK and BlackRock-linked funds.

-A breakthrough of the $2,800 supply/demand zone on the weekly chart and the occurrence of a short squeeze were identified as key turning points for a future rally.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*