Ethereum is approaching an all-time high after a strong rally, but renowned trader Michaël Vande Poppe has urged investors to be cautious. In a new market update, he outlined why ETH is overexpanded in the short term, and why partial profits could be a smarter move.
Ethereum rally and false risks
Ethereum surged by more than 120% in under two months, rising from around $1,500 to over $4,700. Van de Poppe compared the current surge to Ethereum’s 2022 low when assets were trading nearly $1,300 after crashing from $4,800. At the time, the downside risk was limited and the possibility of an increase was enormous.
Now, Ethereum “sees slightly incorrectly upside down,” he said. When ETH last hovered for around $4,000 earlier this year, it received a 65% revision to $1,380. Van de Poppe warns that there is a significant risk of buying at these levels.
Why is profitable?
Traders emphasized the need to secure profits rather than retaining volatility. “If you’re avoiding profits, you risk holding it through the next bear market,” he said.
To illustrate, Van de Poppe shared a portfolio scenario. He said that after the large rally eased the impact of the revision, it would sell 30% of its ETH holdings and also provide cash to buy back at a lower price. This allows investors to accumulate more ETH over time while continuing to control risk.
On the charts, Ethereum shows signs that it was bought. Van de Poppe points to high RSI measurements across multiple time frames, suggesting that longs are significantly exposed while trading volumes suggest that shorts are being liquidated.
He also highlighted past examples where ETH broke only because it crashed between 40-50% above its previous high. A drop back to the $3,600-$4,000 range would not be surprising, he added.
Rotation to Altcoins that are likely
According to Van de Poppe, Crypto’s money flow cycle moves from Bitcoin to Ethereum, then to Altcoins. He said ETH is in a range of changes in fluidity into ecosystem projects such as optimism, arbitrum. “Nothing has risen forever,” he said. “The lock on profits is guaranteed to be safe, not to apologise for any inconvenience.”
Related: These eight altcoins could quadruple in four months, says Michaël Van De Poppe
Van de Poppe believes Ethereum will remain strong in the long term, but he argues that the short-term risks are leaning towards the downside. So he recommends expanding 20-40% of ETH holdings, locking in profits and staying flexible on the next purchase opportunity.
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