Ethereum Eyes $3,500 as Experts Warn: ‘Drawdowns Remain Possible’ | Altcoins November Report

October didn’t live up to the “Uptober” expectations. The brutal market correction on Oct. 10 still weighs on sentiment. Investor pessimism has been fueled by U.S.–China tariff tensions, the Fed’s policy stance, and weak economic data. But can November change the tone and bring optimism back?

Throughout the month, the crypto community kept repeating “Uptober” and talking about an upcoming altseason. Yet Ethereum (ETH) underperformed, closing October without the expected breakout. Historically, however, Q4 has been a positive period for the asset. Despite the recent drawdown, November and December could still shift the picture.

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ETH has slipped below $4,000 and is now holding near $3,800. If the bearish scenario plays out, a deeper pullback toward $3,500 remains possible. This is a key psychological level that may determine the next market direction.

In 2024, Ethereumended Q4 up 28.34%, and in 2023, 36.66%. Still past performance doesn’t guarantee future gains. The market cycle stage remains uncertain. Some analysts believe the altseason peaked this summer, while others expect another wave.

Maria Carola, CEO of StealthEx, told Cryptonews that market risks remain elevated. Even though the market looks stronger than in previous cycles, she warned that sudden shocks could still trigger sharp declines:

Drawdowns remain possible. As the market is now more liquid than during previous cycles, the frequency of extreme flash events is reduced, but systemic risk, such as liquidity withdrawal by major LPs, a surprise macro event, or a regulatory shock, can still trigger sizable moves. The worst-case scenarios are less likely than in thinner markets, but they are not impossible. Practically, risk is now asymmetric, with upside requiring durable, deep liquidity and sustained inflows, while downside can be catalyzed by rapid deleveraging. Managing that asymmetry is what traders and institutional desks are focused on.

‘Ethereum Breach Alone Is Necessary but Not Sufficient’

Speaking with Cryptonews, Cais Manai, Co-Founder and Head of Product at TEN Protocol, noted that Ethereum’s recovery remains uncertain amid shifting macro conditions. Market participants are waiting for a clear signal before committing to the next major trend:

ETH’s underperformance post-correction is clear, and the next move hinges on macro. If the Fed leans dovish and risks appetite returns, we could see ETH reclaim $4,500 fast, especially with ETF inflows still healthy. But if $3,800 cracks and macro stays sticky, the selloff likely deepens. Right now, sentiment has flipped to cautious, so it’s about who blinks first, the Fed or the market. Until then, ETH trades heavily relative to BTC.

Ethereum’s performance is still closely tied to Bitcoin. A strong Bitcoin (BTC) historically hasn’t been the best scenario for altcoins. According to Curvo, in 2024 BTC rose 135%, while ETH gained 55%. In 2023, BTC advanced 147%, and ETH 86%. Interestingly, in 2021 and 2020, Ethereum outpaced Bitcoin with gains of 436% and 423%, respectively. It’s also worth noting that in 2022, both coins corrected to almost the same level.

Will this pattern repeat in 2025? For Ethereum to rise, it’s not enough for Bitcoin’s price or dominance to decline. The asset still needs to remain resilient while quietly moving into the background. Carola explained that while Bitcoin’s slowdown can create room for ETH and other altcoins, it doesn’t automatically trigger rotation:

A drop below a technical level like $3,800 would increase volatility and could either deter rotation or create a value hunt that sparks selective alt moves. Historically, alt seasons need more than an ETH dip. They require supportive BTC conditions and renewed funding inflows. So an ETH breach alone is necessary but not sufficient.

Altcoins Face a Slow and Selective Recovery Ahead

Among altcoins, Zcash (ZEC) stood out the most. The token ranked first in performance over the past 30 days, gaining nearly 290%. That sudden surge triggered a sense of FOMO among some traders, especially since most of the market is still in correction. But as we know, narratives in crypto rarely last long. The key is learning to spot them early — not chasing them at the top.

Carola noted, such rallies often carry a speculative edge. She added that RWA and AI-related sectors could also perform well in the coming months. This trend is already visible in projects like Bittensor (TAO), which gained about 43% in October, and in growing interest toward AI infrastructure tokens following the rise of x402:

We should expect selective recovery. Some of the most attractive sectors are privacy, both momentum and on-chain use cases, as shown in Zcash’s move that reflects speculative and utility interest. Next up is RWAs, which are tangible yield-bearing instruments that attract institutional dialogue. When it comes to AI + Web3 infrastructure, developer activity and real product traction matter. Finally, exchange and middleware tokens, because as exchanges broaden product sets, their native ecosystems can capture utility value.

Despite renewed activity in certain niches, the broader altcoin market still lacks retail participation. According to Gavin Thomas, CEO at TEN Protocol, capital flows are mostly driven by experienced traders rotating between sectors rather than a new retail wave:

Retail’s waking up in pockets. Token sales and new names moving 5x are a good sign, but this is still smart-money rotation, not full-blown mania. The next leg will come when new users enter, not just new tokens.

Conclusion: Rotation, Narratives, and What Comes Next

Capital may soon begin to rotate from Bitcoin into Ethereum and its broader ecosystem, although other players such as BNB and Solana could also take the lead in the coming months. Maria Carola believes that rotation is possible, but it will be selective:

If the market’s next phase is quality altcoins, then ETH is the most likely beneficiary because of its infrastructure role. However, BNB or SOL could outperform it in a narrative-driven mini-cycle if chain-specific catalysts such as product launches, tokenomics updates, or ecosystem incentives materialize.

Gavin Thomas agrees that the next market phase is not yet here and that the turning point will depend on new use cases:

Cycles end with chaos, not calm. We’re nowhere near that yet. The next wave of excitement will come when users experience what on-chain privacy and AI-driven apps can actually do. That’s the inflection point the market hasn’t priced in.

He also notes that Ethereum remains central to the market’s structure:

Ethereum’s still the default risk asset in crypto. It’s not losing relevance, it’s just being forced to evolve. The builders are still here, and the shift toward encrypted execution and stronger data control is what keeps the story alive.

The coming month is unlikely to lift the entire market, yet it may reveal which stories and assets still have the strength to move forward. Investors should keep an eye on markets where volatility remains high, as that’s where trading volumes concentrate. Watching which projects recover faster after the recent drawdowns may offer the best clues about where capital will rotate next.

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice.

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