Ethereum's 29 percent weekly surge has flipped its chart bullish for the first time since February, but the move rests on a short squeeze and a Senate vote that Galaxy Research now gives just a 10 percent chance of passing this year.
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Ethereum jumps 29% as Tom Lee sees rotation to $10,000
Ethereum rose 29.3% to $2,463 over seven days through Aug. 24, outperforming Bitcoin's 21.4% weekly advance as Fundstrat co-founder Tom Lee said the long-awaited rotation into the token had begun.
"This is nearly a decade in the making," Lee said in an Aug. 23 post on X, forecasting Ethereum could "easily" exceed $10,000 within one to two years on tokenization, stablecoins and AI-linked settlement demand.
The advance was driven by a short squeeze that wiped out more than $3 billion in leveraged crypto positions within 24 hours, with shorts accounting for roughly 92 percent of the total. Spot Ethereum ETFs recorded net inflows of about $512.4 million across four sessions, including $219.5 million on Friday with BlackRock's ETHA product taking $173.3 million.
The $10,000 target implies a 306 percent gain from current levels and hinges on the CLARITY Act, which faces a Senate procedural vote in September. Galaxy Research has cut the odds of passage this year to 10 percent from 60 percent, leaving the next leg dependent on ETF flows holding above $70 million a day.
Rotation evidence builds in ETF flows and the ETH/BTC ratio
The ETH/BTC ratio rose to about 0.0318 from 0.02994 on Aug. 17, meaning one Ether now buys more Bitcoin than it did a week earlier. US spot Ethereum ETFs attracted $365 million in July, their strongest month since launching in 2024, versus $205 million for Bitcoin funds — the first month Ethereum inflows exceeded Bitcoin's by more than two to one.
BitMine Immersion Technologies, where Lee serves as chairman, reported holdings of 5,815,164 ETH as of Aug. 16, about 4.8 percent of Ethereum's estimated 120.7 million supply. The company has staked 5,067,309 ETH, roughly 87 percent of its treasury, and projected about $250 million in annualized staking revenue at a 2.61 percent yield.
Overbought signals and the September Senate vote
The technical picture carries warnings. The relative strength index sits at 85.7, firmly in overbought territory, and Ethereum trades 27 percent above its 50-day moving average of $1,905.61. The token remains about 50 percent below its August 2025 record of $4,946, and Polymarket traders assign a 51 percent probability to $3,000 and just 16.5 percent to $4,000.
The regulatory backdrop has improved. The SEC under chair Paul Atkins voted to publish a proposal for public comment that would let mature networks like Ethereum exit securities classification, and the March joint SEC-CFTC statement listed ether among sixteen examples of digital commodities. But the CLARITY Act remains stalled, and the Ethereum Foundation's Platåberget testnet, launched Aug. 17, is testing features for the Glamsterdam upgrade slated for the fourth quarter of 2026.
The durability of the rally likely hinges on whether ETF inflows persist and whether the Senate vote in September goes the market's way. A monthly close above $2,400 would signal the breakout was absorbed; a close back below $2,200 would mark it as sold into.
This article is for informational purposes only and does not constitute investment advice.
