A prominent Ethereum (ETH) evangelist is interpreting the cryptocurrency’s recent sharp decline as a beneficial pause rather than a bearish reversal.

Tom Lee of Fundstrat sees the drop toward $4,150 not as a reason for alarm, but as a “healthy” development that could set the stage for a run toward $5,100.

A Strategic Pullback Before Higher Gains

Lee shared analysis from Fundstrat’s Head of Technical Strategy, Mark Newton, in an August 19 post on X, where the analyst indicated that Ethereum is undergoing a “minor correction” that could see its price move down to a range between $4,075 and $4,150 by the middle of this week.

Newton described this potential entry zone as presenting a “very good risk/reward” opportunity, with an expectation that the asset will subsequently advance to approximately $5,100, marking a new all-time high.

His projection dovetails with observations from other market watchers, who point to the CME futures gap near $4,070 as a magnet level. Ethereum dipped from last week’s high of $4,776 and was trading around $4,293 at the time of writing, brushing levels between $4,100 and $4,250, identified by analysts such as Michaël van de Poppe as strong support.

Meanwhile, whale activity and falling exchange reserves are also hinting at confidence from larger holders. Recent data from CryptoQuant showed ETH balances on exchanges had dropped to a three-year low of 18.5 million. However, while retail wallets lightened their exposure, institutions appear to be buying into weakness, with analyst CryptoJack noting on X that “whales are stacking.”

Nonetheless, Lee and Newton’s perspectives clash with a notable shift in short-term trader sentiment. Data from prediction market Polymarket shows the belief among bettors that ETH can reach $5,000 by month’s end has plummeted to 26%, down significantly from 64% just days prior.

Price Performance and the Bigger Picture

In the last 24 hours, ETH has fluctuated between $4,204 and $4,382, before settling at $4,293, a price that’s only 0.5% higher than it was a day ago.

On the weekly timeframe, the coin’s movement is just as flat, with data from CoinGecko showing it also dropped by 0.5%, a modest loss compared to Bitcoin’s 2.5% dip in that time, as well as the broader crypto market’s 3.9% decline. Zooming out, ETH remains up 18.1% over two weeks, 15.8% in a month, and nearly 64% year-on-year.

The consolidation comes even as institutional demand is reshaping the market structure. For instance, Bitmine Immersion Technologies, where Lee serves as chairman, announced last week that it had accumulated 1.15 million ETH worth nearly $5 billion, making it the largest Ethereum treasury globally.

This development adds to speculation that Wall Street adoption and on-chain supply contraction could support longer-term valuations far above current levels, with Bitmine even floating $60,000 as an eventual price target.