Ethereum (ETH) continues to trade around $2,440 as the cryptocurrency market shows a strong recovery, breaking free from a seven-month downtrend that followed its January peak.

Broad Market Rally

According to overseas crypto media outlet Coinape, the total cryptocurrency market capitalization rose 0.5% over 24 hours to approximately $2.65 trillion. Bitcoin (BTC) traded around $78,500, while XRP traded near $1.38.

Over the past 14 days, Ethereum gained 29%, Bitcoin 22%, and XRP 33%, with all three assets showing clear strength.

Tom Lee: "ETH/BTC Ratio Could Reach 0.04 by Year-End"

Coinape reported that Tom Lee, co-founder of Fundstrat and chairman of Bitmine Immersive Technologies, predicted that Ethereum's performance relative to Bitcoin would improve by the end of the year.

On the 28th (local time), speaking on the Milk Road Show, Lee forecast that the ETH/BTC ratio, currently around 0.03, could reach 0.04 by year-end. Under his scenario, if Bitcoin reaches $150,000 and the ETH/BTC ratio rises to 0.04, Ethereum's price would come out to roughly $6,000.

Lee assessed that even the $6,000 projection is conservative, citing that the ratio approached 0.08 during the 2021 bull market. Coinape explained that this outlook reflects Ethereum's relative strength, having risen 29% over the past 14 days. However, it added that for this calculation to materialize, both assets would need sustained demand, and the ETH/BTC ratio could serve as an indicator of whether Ethereum continues to outperform Bitcoin in the coming months.

The 'CLARITY Act' as the Key to Institutional Inflows

Lee pointed to the CLARITY Act as the key short-term factor for drawing institutional participation into Ethereum. The bill would clarify the U.S. cryptocurrency regulatory framework and divide the roles of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The U.S. Senate is expected to hold a crucial cloture vote on September 15 (local time), and Coinape reported that the outcome of this vote could determine whether the bill advances to further debate and approval procedures.

Lee said regulatory clarity matters more for traditional financial firms than for cryptocurrency companies that have already established their footing. He explained that with clear rules in place, banks and asset managers could develop cryptocurrency-related services with greater confidence. However, according to Coinape, he predicted that Ethereum would still perform well even if the U.S. Congress fails to pass the bill in September (local time), on the grounds that developers' innovation has continued even without comprehensive regulatory standards in place for years.

Ethereum Spot ETFs See Over $100 Million in Daily Net Inflows

Institutional investors' interest was also evident in U.S. Ethereum spot exchange-traded funds (ETFs). According to data from SOSOValue cited by Coinape, Ethereum spot ETFs saw net inflows of $102.18 million on the 28th (local time) in a single day. Cumulative net inflows reached $12.97 billion, with daily trading volume recorded at $1.37 billion. The combined net assets of these ETFs grew to $15.23 billion, accounting for 5.20% of Ethereum's total market capitalization.

By individual product, BlackRock's ETHA took in $83.79 million that day (local time), the largest inflow among individual products. ETHB saw inflows of $42.64 million, but fund flows in other products partially offset this, bringing the total daily net inflow to $102.18 million. Coinape reported that continued inflows could strengthen liquidity and provide a greater support factor for Ethereum amid uncertain market conditions.

Key Resistance Level to Watch: $2,500

Coinape identified $2,500 as the key resistance level for Ethereum's price this week. It projected that a decisive break above $2,500 could sustain the ongoing recovery and open room for further gains consistent with long-term ETH outlooks. Conversely, it explained that repeated failures to break through could keep Ethereum's price within its current range, and that if the upward momentum weakens, the area around $2,400 could serve as the immediate reference point.

Coinape also noted that Bitcoin's movements will continue to significantly influence Ethereum's price, as Lee's long-term outlook for Ethereum itself partly depends on the scenario of Bitcoin reaching $150,000.

[This article is by no means investment advice. The content may be merely opinion, so please do not use it as a reference or material for investment decisions. All investments are made at each individual's own judgment, and the final responsibility lies with the investor. This publication assumes no responsibility whatsoever.]