Summary Ethereum is breaking out above $2,600 with a high-conviction technical setup, signaling the start of a potential multi-year bull phase with projected upside targets of $5K, $10K–$12K, and even $54K. A favorable political shift is fueling the rally: President Trump has designated crypto a strategic asset, dismantled anti-crypto regulatory forces, and appointed a White House advisor for crypto policy. Institutional adoption is accelerating as BlackRock and Fidelity pour hundreds of millions into ETH spot ETFs weekly. Ethereum is also becoming the backbone of tokenized financial instruments. Fundamentals and technicals are aligned: Ethereum is not just seeing capital inflows—it’s taking out its 200-day and 200-week EMAs, monthly RSI is launching off historic rally zones, and the ETH/BTC ratio is turning decisively in ETH’s favor. Ethereum is the financial operating system for the emerging Intelligence Economy, with real-world use cases, tokenized assets, and structural demand driving a transition from speculative trade to institutional-grade investment. As Ethereum ( ETH-USD ) challenges the key $2600 resistance level, the technical setup is for a powerful long-term breakout rally. This is accompanied by a very strong set of fundamental circumstances that support the technicals. My short-term target is approximately $5000, intermediate-term $10-12,000, and longer-term $54,000. FUNDAMENTALS First, let’s contextualize the setup. Ethereum is the basis for much of the emerging Web3 economy. ERC‑20 tokens, Layer‑2 rollups, decentralized finance ["DeFi"], Non-fungible tokens ["NFTs"], Decentralized Autonomous Organizations ["DAOs"] are all based on the ETH smart contract ecosystem. While there is competition, Ethereum still dominates the space in terms of developer activity and total value locked-in. A dramatic shift from a hostile to a favorable political and regulatory environment is the wide spectrum backdrop. President Trump’s executive orders gave crypto the status of a strategic asset and put an end to the DOJ’s anti-crypto task force. Crypto acceptance is becoming normalized now with the White House appointing David Sacks as Special Advisor for AI & Crypto. Congress is advancing bipartisan frameworks like the CLARITY Act, FIT21, and the stablecoin GENIUS Act, with passage expected by the end of 2025. This will create regulatory clarity for digital assets, staking, stablecoins, and smart contracts. In this supportive political context, Ethereum is seeing explosive institutional adoption. Spot ETFs led by BlackRock ( ETHA ) and Fidelity ( FETH ) have drawn hundreds of millions in weekly inflows . Asset managers are embedding Ethereum-based tokenization into the real-world financial infrastructure by launching on-chain money markets and Treasury instruments. This institutional backing is creating a structural bid under ETH. As a result, Ethereum is riding a wave of institutional capital inflows. Spot ETFs attracted more than $148 million in net inflows on July 3, including BlackRock’s ETHA ($85 million) and Fidelity’s FETH ($64.7 million). Inflows continued on July 7–8, with daily ETF purchases exceeding $120 million. This influx represents regulated exposure and persistent structural demand from institutions involving trusted names (BlackRock, Fidelity). Fidelity and BlackRock are also pioneering tokenized money markets and Treasury funds on Ethereum. Fidelity’s “OnChain” share class launched on May 30. Real-World Asset ["RWA"] tokenization volume is about $24 billion, 60% of which sits on the Ethereum blockchain. These moves reflect a shift in the view of Ethereum from a speculative crypto play to core financial infrastructure. It's starting to be seen as a platform underpinning institutional asset issuance, transparency, and settlement. The convergence of regulatory legitimacy, institutional participation, and real economic and financial utility creates a fundamental bullish case for ETH, which is confirmed by the technical picture. TECHNICALS Let's start with the short-term view. Since May, ETH has been consolidating above and below the $2600 level in a sideways pattern: BullBear.Substack.com, TradingView It looks set to take out that level now following a drop to $2100 in June. A close above $26-2700 should get a fast new rally high around 3k. Daily chart: BullBear.Substack.com, TradingView A break of $2.6k should also take out that trendline and leave behind the 200-day EMA, which has anchored the consolidation of the last two months. The red upper rail of the formation should be seen quickly, with $4k a natural area for profit taking and a consolidation. ETH Weekly: BullBear.Substack.com, TradingView The ETH price is not only taking out its 200-day EMA after consolidating around it; it is also doing the same for its weekly 200-day EMA. That's a powerful technical configuration. Weekly RSI has a long way to go before it gets upside extended, and we can see that a wave 3 position can be called here. That means that the upper resistance zone of $4–5k would be the wave 3 target. After a bit of volatility there, we can expect wave 5. If the current trendline were to hold, then we could be looking at 10k by March 2026. That's just eyeballing at this point. We would have to see how the trend develops and the corresponding state of RSI. Still, a 500% rally from the April low is well within the performance profile for this asset. Monthly ETH: BullBear.Substack.com, TradingView The long-term structural setup is for Major Wave 5. After the Major Wave 1-2 sequence, Wave 3 yielded an over 3000% return. A similar rally for Wave 5 would price ETH at $54k. If the duration of the rally is similar, it would reach that mark by December 2026. Note that in addition to currently taking out the 200-day and 200-week EMAs, price is also rising above the key 10-month SMA. The last major wave rallies started when the monthly RSI was at the same level it saw at the April low (when I turned bullish on Ethereum). Basically, April 2025=March 2020. Or something similar. With much more supportive fundamental conditions. The Ethereum/Bitcoin ratio also confirms the long-term buy setup: BullBear.Substack.com, TradingView When Bitcoin dominance peaked in December of 2019, the next big ETH rally was not far away. The setup is similar this time as well. Let's look at crypto relative performance. Since the April low, only TAO has beaten out ETH. ETH is outperforming BTC by almost 2 to 1 factor: BullBear.Substack.com, TradingView 3 Months: BullBear.Substack.com, TradingView 1 month: BullBear.Substack.com, TradingView It's clear that Ethereum is attracting capital and separating from the pack. That doesn't mean that other plays won't also do well in this cycle, but we have passed the point of pure speculative bets and entered the phase of real investment and structural build-out. While I wouldn't put all your eggs in this single basket, it's not a bad idea to take some BTC and reallocate to ETH at this time. Or maybe sell some Apple stock and put it into a forward investment. Ethereum is one significant component of the emerging Intelligence Economy that investors should be taking very seriously right now. The new economic engine will distribute value in dedicated tokens, many of which will be based on the Ethereum blockchain. For more context and deeper background on this, read: Investing In The Intelligence Economy: Semantic Graph Engines