Ethereum Sentiment Turns Positive but Beware a Final Leg Lower, Analysts Warn

Ethereum is showing its strongest relative momentum in years, although traders caution that this does not necessarily translate to higher prices in the short run.Will ETH Reclaim Record High Against BTC?In an interview with Crypto James on Aug. 13, analyst Trader Mayne said Ethereum’s performance against Bitcoin is beginning to show signs of a meaningful trend shift after roughly five years of persistent weakness.While Ethereum has previously reached new all-time highs in dollar terms, Mayne cautioned that ETH may never reclaim its record high against Bitcoin.However, the ETH/BTC chart is now attempting to establish a higher low following a trendline breakout.The trader sees a case for short- to medium-term Ethereum strength if ETH/BTC can continue reclaiming key resistance levels. That doesn’t eliminate substantial downside risk.Mayne believes Ethereum could still trade below $1,000 during the current cycle if Bitcoin experiences another major capitulation.“If Bitcoin goes to like $50,000 or $45,000, I would not be surprised at all if ETH makes another low,” he said.Over the past month, ETH is up 1.5%.Staking To Create Demand?Institutional developments could provide another tailwind for Ethereum.Fidelity has filed to add staking to its spot Ethereum ETF, potentially allowing the Fidelity Ethereum Fund (FETH) to stake up to 100% of its more than 480,000 ETH, currently worth roughly $880 million.The fund would retain 85% of staking rewards and distribute proceeds to investors in cash quarterly.Ethereum treasury company BitMine Immersion Technologies ) argued that staking could attract yield-oriented investors to ETH ETFs, potentially creating additional demand for ETH.BitMine Chairman Tom Lee agreed with the assessment.Is It Better To Enter ETH Now?Pseudonymous trader DonAlt is also building an Ethereum position despite acknowledging that it is trading near resistance.He said he has already bought ETH and plans to add more over the coming days as he prefers the risk of entering at a less-than-perfect price to remain completely unexposed.DonAlt plans to increase the position further if Ethereum retests lower support.Image: Shutterstock