Tom Lee Says 'Don't Abandon' Ethereum, But ETH Plunges 6% As Gold Rallies 18%

Fundstrat’s Tom Lee urged investors not to abandon Ethereum (CRYPTO: ETH) out of FOMO, yet ETH plunged 6% on Thursday as gold and silver’s explosive rally continues.

The Gold Vortex Problem

Lee responded to a post from BitMine (NYSE:BMNR) highlighting that gold and silver surged 18% and 52% year-to-date. 

The company called the moves “astounding and impressive” but warned they’re creating a “vortex” that’s sucking investor attention away from structurally strong themes like AI and crypto.

Lee’s message was direct: “Own what works. But don’t let FOMO make you abandon good ideas.”

The capital rotation issue ties back to Lee’s earlier analysis this week. 

He explained that the metals rally is diverting capital from crypto because traders are tying up funds in gold and silver momentum trades. 

Gold crossed $5,000 and silver hit $110, creating massive moves that traders are chasing with borrowed money and options.

Compounding the problem, the October crash “crippled many of the key players in industry, some exchanges and market makers,” leaving crypto without the leverage that typically amplifies rallies.

The Technical Damage

Ethereum is down 6% on the day, with mounting technical concerns.

ETH broke below a critical ascending trendline that held since the lows around $2,600. 

The price now tests this broken trendline from below, which typically acts as resistance on retests.

Making matters worse, all four EMAs (20, 50, 100, and 200-period) sit above current price in a bearish formation. 

The 20 EMA at $3,026 and 50 EMA at $3,089 act as immediate overhead resistance.

The Supertrend indicator at $3,250 flipped bearish and sits well above price, confirming the downtrend and suggesting momentum shifted decisively.

Support Levels And Rotation Thesis

Support sits at $2,900-$2,950, with more substantial support near $2,600-$2,700 where previous consolidation occurred.

For any bullish reversal, ETH needs to reclaim the broken trendline and push back above the 20 and 50 EMAs. Until that happens, rallies get sold near resistance levels.

Lee’s rotation thesis: When gold and silver take a break, capital rotates back into crypto, leading to a Bitcoin (CRYPTO: BTC) and Ethereum surge.

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