Bitcoin is approaching a pivotal resistance level of $91.8K as supply on exchanges hits multi-year lows, signaling a potential for significant price movements driven by growing institutional demand. Ethereum, on the other hand, is nearing an important breakout zone, with Tom Lee, the co-founder of Fundstrat, making bullish predictions about a forthcoming crypto super-cycle fueled by increased adoption and liquidity.
As of today, Bitcoin is working towards a critical retest of the $91.8K mark, a level it lost following the recent Federal Open Market Committee (FOMC) meeting which led to a broader market correction. Despite the downturn, the market structure remains stable, with higher lows observed on lower timeframes, indicating an intact upward trend. A successful reclaim of this resistance could propel Bitcoin’s price sharply higher. Conversely, a failure to break through this zone or a drop below $89.5K could lead to further declines, potentially retesting the $80K region, where a double-bottom pattern might develop.
Supply Dynamics and Market Sentiment
The ongoing supply squeeze is intensifying as Bitcoin reserves on exchanges have fallen to their lowest levels in years. In 2021, exchange deposits were around 88,000 BTC and peaked at 126,000 BTC at the previous all-time high. Currently, these figures are sharply reduced, even with Bitcoin hovering near $80K. The diminished supply on exchanges suggests a weakening of sell pressure, as more Bitcoin transitions into cold storage, exchange-traded funds (ETFs), and long-term custody solutions. This decline in exchange inventory means that any uptick in demand could encounter a thin order book, making rapid price increases more likely.
Ethereum is also approaching a critical moment in its price action. After recently being rejected at $3,400, it has slipped towards the $3,000 to $3,100 support zone. A rebound from this area could ignite another strong upward movement, while a decline could pave the way for a descent to $2,800. Despite these short-term fluctuations, Ethereum’s outlook remains bullish, having recently surpassed $4,000 with notable resilience. Many analysts believe Ethereum is mimicking Bitcoin’s trajectory from 2017, just before its explosive mainstream breakout.
Institutional Interest and Future Predictions
Institutional interest in Ethereum is swelling as asset managers and hedge funds increasingly acknowledge its vital role in decentralized finance (DeFi), stablecoins, and blockchain infrastructure. Coupled with record on-chain activity and a surge in developer engagement, Ethereum is projected to reach and potentially exceed $5,000 in the near future.
Tom Lee remains confident about the prospects for both Bitcoin and Ethereum. He argues that the markets continue to underestimate the influence of liquidity, institutional adoption, and monetary policy as we approach 2026. “Investors are still early,” Lee stated, referring to crypto as the “best-performing asset of them all.” He anticipates that there will be 1.1 billion active crypto wallets by the end of 2025, characterizing this as the fastest wealth accumulation cycle in history.
Lee emphasizes that crypto’s sensitivity to the business cycle should not be overlooked. With the Institute for Supply Management (ISM) index poised to rise above 50 after a prolonged period, historical data suggests that such a shift often triggers super-cycle rallies in Bitcoin and Ethereum. He reiterated his long-term view, asserting that the market may already be entering a Bitcoin super-cycle, driven by structural changes in liquidity and heightened institutional demand.
As for Ethereum, Lee views any dips toward $3,000 as offering compelling long-term value, likening them to temporary pullbacks in high-conviction stocks such as Nvidia. With liquidity conditions expected to improve significantly by 2026, he believes that major crypto assets with solid fundamentals are well-positioned for substantial growth.
The cryptocurrency market’s reaction to Federal Reserve news is swift, as changes in interest rates can significantly affect liquidity, investor risk appetite, and the strength of the dollar. While rate cuts may provide long-term benefits by enhancing liquidity, immediate responses can be negative if the Fed indicates caution. Institutions tend to accumulate gradually during downtrends, focusing on long-term positioning rather than short-term fluctuations.
As cryptocurrencies increasingly enter mainstream discussions, their prices are expected to respond more dynamically to interest rates, inflation data, and liquidity trends. With analysts closely monitoring these developments, the stage is set for potentially transformative movements in the crypto space.
