Ethereum Rally Continues, $5,000 by Year’s End Now Seems an Option

Ethereum’s recent recovery has caught traders’ attention in the crypto world, and some analysts are now led to believe that the second-largest cryptocurrency could be gearing up for a sprint towards a $5,000 milestone by the end of the year. The current Ethereum rally is taking place in light of several major intercrossing macroeconomic and crypto-specific drivers, where a leading one is the recent breakout of the Bitcoin price. Currently, Ethereum is trading at $2,600.

Top analyst is bullish on Ethereum

Crypto analyst Michaël van de Poppe (known as @CryptoMichNL on X) has recently published several tweets on Ethereum and the prospects he sees for it this year. Poppe stressed that Ethereum has broken above its major resistance levels and now ETH is gearing up for a continuation of the rally.

Three days ago, Poppe tweeted: “The biggest upwards move on $ETH on a weekly candle in a long time.” It showed a 40% price surge, with the last time a similar large green candle was observed being November 2024. On May 14, he also tweeted that the ETH/BTC pair showed a 40% rise since the recent low. The analyst added that he would be expecting “some more upside” on this chart.

Today, Poppe published a chart, predicting an explosive growth as a likely option for Ethereum by the end of the year, saying that if it happens, it could become a major bullish trigger for the whole altcoin market.

Key drivers fuelling the Ethereum rally

The recent rally of Ethereum has not been happening in a vacuum. Ethereum is following the crypto market leader, Bitcoin, and BTC price surged above the $100,000 level, which extended to topping $105,000. The $100,000 is a psychologically important milestone that has reignited powerful bullish sentiment both in the crypto market and in the institutional and retail segments.

The two drivers that propelled Bitcoin above that threshold took place last week. The first one was the announcement of the Federal Reserve about its intention to maintain the interest rates at the current levels. The second one was the successful trade deal between the US and China made over the weekend. Both governments agreed to lower trade fees against each other’s imported goods for a period of 90 days. The US has brought them down from 145% to 30% and China reduced them temporarily from 125% to 10%.

These two events helped Bitcoin skyrocket and Ethereum followed in its footsteps, as well as many other altcoins. The stock market also exploded, heading upwards.

And Bitcoin is known for its frequent correlation with stocks, in particular with the Nasdaq and the S&P 500 indexes. Speaking of the latter, this week the shares of the US biggest cryptocurrency exchange, Coinbase, were added to S&P 500, which proved to be an important and bullish development for the entire crypto space and was celebrated by many.

Another important driver here were the numerous inflows in both Ethereum and Bitcoin ETFs. BlackRock’s IBIT has scooped up roughly $5 billion worth of Bitcoin over the past 20 days – since about April 24. The highest daily inflow so far was reported on April 28 and that was $970.9 million. This week so far, IBIT has raked in $69.4 million.

Besides, of the largest banking conglomerates, Goldman Sachs, has revealed that it has an exposure to the BlackRock’s Bitcoin ETF valued at $1.4 billion (30.8 million shares).

As for spot Ethereum ETFs, netflows here have also been green as of late. On Tuesday this week, they absorbed $13.37 million in inflows. Half of that amount went directly into Grayscale Ethereum Trust – $7.36 million.

Pectra upgrade launched on May 7

Another important driver, but perhaps a minor one, that pushed Ethereum to the current $2,600 level was the Pectra upgrade activated on the mainnet on May 7. A combination of Prague and Electra proposals, this was a fundamental development and the first one since the Dencun upgrade that took place in March 2024.

Pectra was meant to allow users to pay gas fees not only in ETH but also in stablecoins, such as DAI and USDC. It was also intended to bring down transaction costs by tying multiple transactions into a single one (transaction batching). Besides, it offers a scalability increase, a better user experience, and improvements for the validator infrastructure.

Will Ethereum reach $5,000 by year’s end?

With Bitcoin being a major driver for the altcoin market and the largest altcoin, Ethereum, it may be possible that ETH will show explosive growth by the end of 2025. Many large figures in the investment world assume that by the year’s end, Bitcoin is likely to reach a new all-time high and double its market value. Tim Draper believes BTC will reach $250,000 by that time. Robert Kiyosaki, the “Rich Dad Poor Dad” author, has named a range between $180,000 and $200,000 this year.

If Bitcoin indeed soars that high, odds are that Ethereum will be following it.