Ethereum Hits 7-Month High, Marks First Close Above $2,750 Since Late January

• Tom Lee said crypto’s August rally helped set the stage for September stock gains.
• Lee anticipates the S&P 500 will surge above 8,000 by the end of the month, saying investors remain underexposed after recent de-risking.
• According to Lee, crypto rallies usually take a lead over S&P 500 by a month.

Ethereum (ETH) hit a seven-month high on Tuesday, marking its first close above $2,750 since January 29. 

On Monday, Fundstrat’s Tom Lee noted that the crypto rally in August helped drive the stock market’s September gains. 

Lee said crypto moves typically lead the S&P 500 (SPX) by about a month.

Ethereum’s price traded around $2,758 and was up over 1% over the past 24 hours. ETH traded significantly above this range for most of January, hitting above $3,307 on Jan. 17, but then dropped sharply into February. 

On Stocktwits, the retail sentiment around ETH remained in the ‘bullish’ zone, while chatter around it stayed at ‘normal’ levels over the past day.

Lee, who is also Chairman of Bitmine Immersion Technologies (BMNR), pointed to that pattern as one reason he's sticking with a bullish call on stocks for the rest of September.

Why Lee Says S&P 500 Can Hit 8000 By Month-End

Lee made the case in a CNBC interview on Monday. Lee said that while last week was "maximum pain, maximum pressure" for markets, with the Federal Reserve raising rates, oil prices high, and bond yields staying high, that pressure has now eased. He said oil cooled over the weekend and “rates [were] behaving.” With the market oversold, he said stocks now have "all the ingredients" for a sharp rally.

However, sentiment hasn't caught up to the improving backdrop, Lee said. He added, "I think that there is fuel here. I think maybe where I'm going to disagree is I think sentiment is still quite bearish.” 

That gap, in his view, leaves room to run, and he expects the rally could push the S&P 500 above 8,000 before the end of the month, citing AI stocks still trading below their June highs as evidence of the ground left to make up. 

“There's been a lot of de-risking because they don't want to be buying stocks into a rising Fed, so I think people are offside,” Lee said.

Lee linked that call to Bitcoin's move last month. He said crypto rallies in August tend to predict stock moves about a month later. If Bitcoin and Ethereum were strong in August, he sees that as an early sign of a stock rally in September.

His recent comments also follow his earlier September call, in which he said his base case was a Fed hold, which he expected to spark a mid-month rally. 

However, the Fed raised rates by 25 basis points, and Bitcoin rallied soon after – a point industry veterans have previously noted. 

Read also: Crypto's Next Catalyst Could Be Tokenized Stocks: Clear Street Raises Bullish, Coinbase Targets

For updates and corrections, email newsroom[at]stocktwits[dot]com.