Tom Lee Says Ethereum Rebound Could Start Now

Lee argues that the asset has historically staged V-shaped recoveries after major drawdowns. While market technician Tom DeMark flagged $1,890 as a potential bottom level, on-chain data shows strong long-term conviction, with a record 4 million ETH waiting to stake and more than 30% of total supply now locked.

Ethereum Nearing Key Bottom

Fundstrat’s head of research, Tom Lee, believes Ethereum is nearing a bottom and is poised for another sharp recovery, despite the mounting frustration among investors after a steep recent sell-off. At a conference in Hong Kong, Lee pointed out that since 2018, Ethereum endured more than eight drawdowns exceeding 50%, and each time the asset ultimately staged what he described as a “V-shaped” rebound.

According to Lee, the pattern has been remarkably consistent. He explained that Ethereum dropped 64% between January and March last year alone, yet recovered at nearly the same pace as the decline. Historically, he said, the asset bounced back 100% of the time after similar collapses. This suggests that the current downturn may be another instance of a familiar cycle rather than a structural breakdown. 

Market technician Tom DeMark added a more specific price framework, and identified the $1,890 level as a potential bottom. However, he suggested the market could briefly undercut that level twice before forming what Lee described as a “perfected bottom.” 

Recent price action shows Ethereum briefly plunging to around $1,760 on Feb. 6, narrowly avoiding its 2025 low of just above $1,400. At press time, Ethereum was trading near $1,970 after suffering a 37% decline over the past 30 days and repeatedly failing to reclaim the $2,000 threshold.

ETH’s price action over the past 30 days (Source: CoinCodex)

Despite the sharp correction, on-chain data indicates that long-term conviction among certain investors is still intact. The queue to stake ETH reached a record high, with approximately 4 million ETH waiting to enter validator status. The wait time to stake has stretched to 71 days, which is the longest on record, according to ValidatorQueue. Meanwhile, the share of total Ethereum supply that is staked has climbed to an all-time high of 30.3%, equivalent to roughly 36.7 million ETH.

Analysts argue that this surge in staking activity effectively tightens liquid supply. One-third of all Ethereum is now locked and earning an annual percentage rate of around 2.83%. Yet demand to stake is robust even as prices fall. Commentators have described the situation as a supply restriction, as billions of dollars’ worth of ETH are being committed during a downturn rather than withdrawn.