Retail traders piled into ether (ETH) bets even as the second-largest token fell below $2,000 for the first time since late March, a signal some analysts say means a deeper decline is on the way.
Social media lit up with buy-the-dip calls the moment ETH cracked the round number, and research firm Santiment’s gauge of bullish-versus-bearish chatter on the token was ripped to a monthly high of 2.4-to-1 on May 27. On Santiment’s scale, sitting deep in the fear-of-where-you-miss-zone.
The audience is historically early. Retail investors rushing to buy a breakdown at a psychological support level is the kind of optimism that tends to come before more pain, not less. Santiment noted that the crowd “usually gets calls wrong.” The cleaner buy appears with that logic when the dip buyers stop cheering and start bleeding.
Standard Chartered remains on the side of the crowd, just with a longer horizon and a more sophisticated analogy. Geoffrey Kendrick, the bank’s head of research for digital assets, used a Thursday note to confirm a call he’s held since February: ether at $4,000 by the end of the year and $40,000 by the end of 2030.
His pitch is that the Ethereum blockchain and its token have split. Transaction counts on the network and the value locked in its apps are near record highs, while ether’s price is down 57% from its August peak against the dollar and down 37% against bitcoin.
Kendrick drew parallels to Jeff Bezos watching Amazon’s stock crater from $113 to $6 in the dot-com crash of 2001, while the business underneath continued to improve. Shares have since risen about 1,000-fold in the intervening quarter century.
“ETH will catch up with the internal metrics, it’s just a matter of time,” he wrote.
Standard Chartered expects the stablecoin market to grow sixfold by the end of 2028, and real-world tokenized assets to grow fiftyfold. It reckons Ethereum carries 50% to 65% of both.
These two buckets already account for more than half of the value locked on the chain. Get to $4,000 and the ether to bitcoin ratio is back at its 2021 high near 0.08. It is currently around 0.03.
As such, the traders who put down real money do not wait for the catch-up. Ether futures open interest, the total stack of outstanding contracts, rose to a record 16.39 million ETH ($32.61 billion) even as the price fell. It’s a caveat: Open interest building while the price is falling is the fingerprint of fresh shorts, not dip buyers. A holder of a short position is betting on a price drop.
Funding, the fee perpetual traders pay to hold a position, remained flat at 0.0022%, so no one is paying to be long either, Coinglass data shows.
So the bullish side of the ETH trade right now is a retail crowd that usually buys too early and a bank repeating a target it set three months ago.
See the audience, not the chart. Santiment’s point is that the time to buy is when the dip buyers finally panic. Right now they are cheering.
