Ethereum Drops 60% From Recent High
Ethereum is down about 60% from its last cycle high. The big drop wiped out billions of dollars in market capitalization for digital assets. More general volatility in the crypto market made the downward trend stronger in January and February.
Even though this drop happened, Ethereum is still trading close to the $2,000 level, which is important for the mind. People in the market still do not agree on whether support will hold. As volatility changes short-term expectations, sentiment has dropped.
Tom Lee Predicts a Classic V-Shaped Recovery Pattern
Tom Lee, the chair of Bitmine, thinks that Ethereum will make a V-shaped recovery. Historically, these kinds of recoveries have quick rebounds after big drops. Lee points to 8 previous 50% drops since 2018.
Lee says that every time the market went down in the past, it eventually went back up in a big way. He thinks that 2026 might be like previous recovery cycles. In the past, investors have made money by buying when there was a lot of fear.
Bitmine Expands Ethereum Holdings Amid Weakness
Bitmine just bought another $80 million worth of Ethereum. The company keeps growing even though its portfolio has lost a lot of money that it has not realized yet. Right now, estimates say that paper losses are close to $6.6 billion.
Bitmine does not want to back down; it wants to increase total ownership exposure. The business already has control over about 3.6% of the supply. Management is said to be aiming for a long-term allocation of 5%.
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Institutional Backing Strengthens Accumulation Strategy
Bitmine gets support from well-known investment groups. It is said that Founders Fund and ARK Invest are both involved in the support. This trust from institutions strengthens long-term faith in Ethereum.
Strategic investors often see downturns as chances to buy more. In the past, crypto cycles rewarded people who were patient during corrections. Volatility may give institutional sponsorship more financial freedom.
Short-Term Pressure from Major Holders Selling
In the last few weeks, many people who own Ethereum have sold some of their coins. It is said that Vitalik Buterin sold about $7 million worth. Stani Kulechov also sold off assets worth more than $8 million.
These kinds of deals made bearish stories more popular on social media. But sales that happen in isolation do not always mean that the structure is weak. Taking profits during corrections is common in market cycles.
Macro Volatility Affects the Current Market Environment
Lee talked about how tariffs have caused volatility in the past. Risk assets were under pressure all year long in 2025 because of bigger macroeconomic issues. Historically, cryptocurrencies have reacted strongly to changes in global liquidity.
People who trade in the market now look at interest rates and trade news. Changes in what people think about policy affect the value of digital assets. Ethereum is still affected by bigger macro cycles.
Long-Term Outlook Remains Highly Bullish
Lee has always had a long-term goal that is very aggressive. In the past, he thought Ethereum would eventually reach $250,000. These kinds of predictions show confidence in the basics of network growth.
Investors do not know if the recovery will happen quickly or not. But historical patterns give hope during deep retracements. The future of Ethereum may depend on renewed institutional momentum.
