Standard Chartered keeps its $4,000 ether call while retail traders step in on the sub-$2,000 pullback

Retail traders stepped in aggressively to buy ether as it fell below $2,000 for the first time since late March, a move that some analysts view as a potential warning sign rather than evidence of a market bottom.

Sentiment indicators show enthusiasm rising into the decline. Santiment data recorded bullish commentary climbing to a 2.4-to-1 ratio on May 27, a level the firm classifies as “FOMO-driven,” where retail optimism typically intensifies during periods of price weakness.

Historically, similar sentiment spikes have often proved contrarian. Retail buying during breakdowns can signal premature positioning, with late entrants absorbing continued selling pressure before a durable bottom is established. Santiment has noted that retail traders frequently misread emotional extremes in market cycles.

Standard Chartered, however, maintains a more optimistic long-term outlook. Geoffrey Kendrick, the bank’s head of digital assets research, reiterated a $4,000 year-end ether target and a $40,000 long-term projection through 2030 in a Thursday note.

Kendrick argues that ether’s price has increasingly diverged from underlying network fundamentals. Onchain activity — including transaction volumes and total value locked — remains near record levels, even as ETH has fallen roughly 57% from its August peak in dollar terms and about 37% against bitcoin.

He compared the situation to Amazon during the 2001 dot-com crash, when the stock plunged from $113 to $6 despite continued operational progress. Over time, Amazon’s valuation ultimately re-aligned with fundamentals, producing outsized long-term returns.

“ETH will catch up to the internal metrics, it is just a matter of time,” Kendrick said.

Standard Chartered expects significant expansion in Ethereum-linked sectors, forecasting a sixfold increase in stablecoins by 2028 and a fiftyfold rise in tokenized real-world assets. The bank estimates Ethereum currently captures 50% to 65% of activity across both categories.

Combined, these segments already represent a substantial share of total value locked on the network. On that basis, a move toward $4,000 would restore ETH’s bitcoin ratio to around its 2021 peak near 0.08, compared with roughly 0.03 today.

However, derivatives positioning suggests traders are not waiting for that outcome. Ether futures open interest rose to a record 16.39 million ETH ($32.6 billion) even as prices declined, indicating increased leveraged positioning into weakness.

Such a setup typically reflects rising short interest rather than dip-buying activity. Funding rates remained largely neutral at 0.0022%, suggesting neither longs nor shorts are paying a significant premium to maintain positions.

The result is a divided market structure: retail traders leaning bullish into weakness, long-term institutional forecasts projecting structural upside, and derivatives markets still signaling caution.

For now, sentiment remains elevated while price trends weaken — a combination that has historically rewarded patience over early positioning.