Ethereum (ETH) briefly reached a record high of $4,956 this morning, with the implied volatility index DVOL rising again, signaling potential significant price swings ahead. Many traders believe this rally has peaked and are choosing to reduce their positions, avoiding what could be the final surge phase. However, some bullish investors remain steadfast in holding ETH. Notably, Wall Street analyst Tom Lee, in an interview following dovish remarks from Federal Reserve Chair Jerome Powell, stated that this is a major positive signal for stocks and risk assets, maintaining his ETH price target of $15,000.

ETH Implied Volatility Rises, Signaling Potential Major Price Swings

Ethereum (ETH) hit a record high of $4,956 this morning, while Bitcoin (BTC) remains stable around $113,000, with its dominance dropping to 57.1%. ETH’s market share has risen to 14.6%, and the altcoin season index has slightly increased to 50.

ETH’s implied volatility index, DVOL (Deribit Volatility Index), has climbed from 60 in early July to 70.85, while BTC’s DVOL has gradually declined from a high of 62 in April to 35, highlighting a divergence in their trends. DVOL measures the annualized implied volatility of crypto assets over the next 30 days, with higher values indicating potential for significant price fluctuations.

As Bitcoin’s volatility has dropped to levels comparable to Starbucks or Goldman Sachs, investors seeking price action have turned their attention to Ethereum, the second-largest cryptocurrency. In recent trading sessions, driven by corporate buying, Ethereum exchange-traded funds (ETFs) have matched or even surpassed Bitcoin’s trading volume.

ETH Hits Record High: Has the Rally Peaked?

However, some traders believe this ETH rally shows signs of topping out. They argue that this surge has been driven by crypto-related stocks, and a potential bear market could bring selling pressure from these holdings. Thus, monitoring the mNAV (market Net Asset Value) of DATs (Digital Asset Treasury companies) will be key to determining whether to re-enter the market.

According to Bloomberg, ETH’s net short positions have reached a multi-year high, indicating growing risk-averse sentiment, with many funds preparing for a pullback. However, this also sets the stage for a potential short squeeze. As a result, many traders are opting to reduce positions, avoiding participation in what could be the final surge phase.

Tom Lee Sticks to $15,000 ETH Price Target

Despite this, many bullish investors remain firmly committed to ETH. Wall Street analyst Tom Lee has garnered significant attention recently. Following dovish comments from Federal Reserve Chair Jerome Powell, Lee stated in an interview that this is a major positive signal for stocks and risk assets. He is optimistic about AI, tech stocks, financials, small caps, and cryptocurrencies, particularly bullish on blockchain and Ethereum.

Having joined the board of Ethereum reserve company BitMine earlier this year, Lee is a vocal advocate for ETH, boldly predicting a price target of $15,000, positioning himself as a prominent Ethereum bull.

Disclaimer: None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy.