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- Regulatory changes and institutional demand are fueling Ethereum's surge toward its 2021 all-time high

- Analysts warn macroeconomic pressures could halt Ethereum's rally despite bullish forecasts and tightening supply

%Ethereum (CRYPTO: $ETH ) has posted weeks of consistent gains, nearing levels not seen since the 2021 bull run and prompting speculation over whether its momentum can be sustained. The token climbed above $4,700 this week for the first time in nearly four years, placing it within reach of its all-time high of $4,878 recorded in November 2021.

Analysts point to a mix of regulatory changes in the United States, institutional acquisitions, and tightening token supply as factors driving the rally, while cautioning that macroeconomic pressures could still reverse the trend.

Recent U.S. policy developments have played a central role in Ethereum's advance. Market analysts cite the GENIUS Act, a stablecoin bill signed into law by President Donald Trump last month, as a key driver. Luke Nolan, senior analyst at CoinShares, said the legislation has triggered "pent-up enthusiasm" for Ethereum, which backs the majority of stablecoins and tokenized real-world assets.

Institutional participation has added further momentum. Data shows that around 8% of Ethereum's circulating supply is now locked in exchange-traded funds (ETFs) or held in corporate treasuries. These holdings, combined with staking activity, are reducing the available supply in the market. Sammi Li, CEO of Singapore-based exchange JuCoin, noted that such accumulation strategies differ from speculative buying seen in previous cycles.

JP Morgan recently projected that Ethereum stands to benefit from "meteoric growth" in the stablecoin sector over the coming years, reinforcing expectations of sustained demand.

Price Milestones and Forecasts

Ethereum's current rally has pushed it to within 6.9% of its record high. Standard Chartered revised its price target sharply upward this week, forecasting a potential rise to $7,500 by the end of 2025 and as high as $25,000 by 2028.

David Siemer, CEO of digital asset manager Wave, said the token's performance is linked to its role as the backbone of decentralized finance, tokenization efforts, and the largest smart contract ecosystem. Institutional inflows through ETH-based ETFs have been a significant contributor to recent price action.

Caution Over Macro Conditions

Despite the bullish backdrop, some analysts remain wary. Max Shannon, senior research associate at Bitwise, observed signs of "froth-infused behavior" among retail participants, which can precede market pullbacks. James Toledano, COO of Unity Wallet, pointed to the broader macroeconomic environment as a potential headwind that could cap gains or trigger corrections.

Ethereum has already seen short-term volatility. After weeks of steady appreciation, the token slipped 3.3% in the past 24 hours to $4,562, underscoring the possibility of rapid reversals.

Market watchers agree that Ethereum's next phase will depend on whether current drivers, regulatory clarity, institutional demand, and constrained supply remain strong enough to offset any downturns linked to macroeconomic shifts.