Ethereum Update: Analyst Warns ETH Could Mirror Bitcoin’s 2020 Crash Pattern

Ethereum’s native token, Ether (ETH), risks a deeper correction despite recently hitting new all-time highs, according to crypto market analyst Ted Pillows.

Ether is Mirroring Bitcoin’s Downtrend From the Past

The world’s second-largest cryptocurrency has already declined by about 16% from its peak near $4,868. But Pillows warns the pullback may not be over yet. If ETH continues to mirror Bitcoin’s price action from its last cycle, the token could fall another 10%–15% toward the $3,500–$3,700 range.

That level isn’t chosen at random. In late 2020, Bitcoin (BTC) broke above its $20,000 all-time high but quickly suffered a sharp 25%–30% drop before finding support near its bull market support band.

The correction served as a reset, clearing overleveraged positions before BTC reversed higher and rallied into price discovery.

Ethereum is now showing similar behavior.

Fresh data from CoinGlass highlights a strong cluster of liquidation levels near $4,000, suggesting this zone could act as a short-term magnet for price.

A sweep of that liquidity would likely trigger forced selling before ETH stabilizes closer to $3,500–$3,700, precisely where its bull market support band lies.

A drop into this zone could flush weak hands and set the stage for a parabolic rally in Q4, just as Bitcoin did in 2020.

Supply Squeeze in the Making

While technicals hint at short-term downside, Ethereum’s long-term outlook is growing increasingly bullish.

Data shows that more ETH is entering the validator staking queue than exiting, signaling rising demand for locked supply.

Meanwhile, US spot Ethereum ETFs have attracted more than $12.6 billion in cumulative inflows, further draining circulating supply.

On top of that, Ethereum’s burn mechanism is removing over 1.1 million ETH annually, keeping supply growth negative at around –0.31% per year. With issuance below burn, ETH is effectively becoming scarcer over time.

Combined with the Fed rate cut prospects in September and the coming months, the demand for Etherem could grow due to a favorable risk-on environment led by cheap credits.

This further suggests that even if ETH dips to $3,500, it could quickly rebound into a parabolic rally once the correction plays out.