Tom Lee isn't ready to give up on Ethereum (ETH). The Fundstrat strategist is doubling down on his ambitious $7,000 to $9,000 price target, even while predicting the cryptocurrency could first tumble to $2,500 before the rally materializes.

The Super Cycle Thesis Lives On

Speaking on the Coinbureau podcast, Lee framed a potential dip toward $2,500 as nothing more than a minor setback in what he described as a "super cycle" setup. He suggested that a fourth-quarter recovery of that magnitude would align with previous periods of aggressive repricing in crypto markets.

The timing is interesting. Ethereum has been struggling to regain any meaningful momentum lately, stuck in a pattern that's frustrating bulls even as some large institutional players appear to be quietly accumulating positions.

The Technical Picture Remains Grim

Ethereum is trying to find its footing after last week's drop toward $2,850, a price level that's acted as a critical support zone since early summer. Buyers did show up at that level, which is encouraging, but the overall structure still looks bearish.

The price continues to trade below the descending trendline drawn from the $4,800 peak. Every bounce attempt since September has been rejected along this line, creating a clear pattern of lower highs. The Supertrend indicator remains red near $3,434, signaling that bearish momentum is still in control. Meanwhile, Parabolic SAR dots sit above the current price, adding another layer of downside bias to the technical setup.

A Breakout Is Coming, But Which Direction?

On shorter timeframes, Ethereum is forming a symmetrical triangle as it compresses between rising intraday support near $2,860 and falling resistance around $2,925. This type of formation typically resolves with a decisive move as price approaches the apex of the triangle.

The RSI sits near 47, reflecting neutral momentum and confirming that traders lack directional conviction right now. If ETH pushes above $2,930, it could open up room toward $3,017, where session VWAP levels cluster. On the flip side, a breakdown below $2,860 would expose $2,760 as the next significant support area.

Coinglass data shows $57.69 million in net outflows on November 25, extending a multi-week pattern of selling activity. More Ethereum is leaving the market than entering it, which helps explain why upside attempts keep failing to gain traction.

Institutional Money Finally Shows Up

After weeks of disappointing numbers, Ethereum ETFs finally registered a meaningful inflow. The category attracted $96.6 million on Monday, with BlackRock's ETHA (ETHA) contributing $92.6 million of that total. That's a welcome change after nearly two weeks of persistent outflows across the sector.

The return of ETF demand coincides with improving liquidity metrics across risk assets more broadly. Still, Ethereum remains locked in its dominant technical downtrend until buyers can reclaim the overhead resistance levels that have capped every rally attempt for months.

Lee's prediction requires patience and a strong stomach. His view calls for Ethereum to drop another 15-20% from current levels before staging a rally that would more than triple prices from that bottom. Whether the market cooperates with that script is anyone's guess, but it's a bold call in an environment where most crypto investors are just hoping for stability.