Ethereum is edging close to its all-time high after a powerful rally, but well-known trader Michaël van de Poppe is urging investors to be cautious. In a new market update, he outlined why ETH may be overextended in the short term and why taking partial profits could be the smarter move.
Ethereum’s Rally and Mispricing Risks
Ethereum has surged over 120% in less than two months, climbing from around $1,500 to above $4,700. Van de Poppe compared the current surge to Ethereum’s 2022 lows when the asset was trading near $1,300 after crashing from $4,800. At that time, the downside risk was limited, and the upside potential was huge.
Now, Ethereum looks “slightly mispriced to the upside,” he said. The last time ETH hovered around $4,000 earlier this year, it suffered a sharp 65% correction to $1,380. Van de Poppe warns that the risk of buying at these levels is significantly higher.
Why Taking Profits Matters
The trader stressed the need to secure gains rather than holding through volatility. “If you avoid taking profits, you risk being stuck holding through the next bear market,” he said, noting that compounding returns is a better long-term strategy than simply hoping for higher prices.
To illustrate, Van de Poppe shared a portfolio scenario. He said selling 30% of ETH holdings after a major rally cushions the impact of a correction and also provides cash to buy back at lower prices. So, investors can accumulate more ETH over time while keeping risk under control.
On the charts, Ethereum is showing signs of being overbought. Van de Poppe pointed to high RSI readings on multiple time frames and noted that trading volumes suggest shorts have been liquidated while longs are heavily exposed.
He also highlighted past examples where ETH broke above previous highs only to crash 40–50% shortly after. A drop back toward the $3,600–$4,000 range would not be surprising, he added.
Rotation Into Altcoins Likely
According to Van de Poppe, money flow cycles in crypto move from Bitcoin into Ethereum then into altcoins. He said ETH is entering a ranging phase where liquidity shifts into ecosystem projects like Optimism, Arbitrum, and others which still have upside potential. “Nothing goes up forever,” he said. “Locking in profits now ensures you’re safe rather than sorry.”
Related: These 8 Altcoins Could 4x in 4 Months, Says Michaël van de Poppe
While Van de Poppe believes Ethereum remains strong long term, he argues that the short-term risk is tilted to the downside. So, he advises scaling out 20–40% of ETH holdings, locking in profits, and staying flexible for the next buying opportunity.
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