As a seasoned researcher with a knack for deciphering market trends and a penchant for crypto, I find myself intrigued by the current state of Ether (ETH). The token is on track to post its first October loss since 2018, but there are signs that it might be setting up for a turnaround.
Currently, Ethereum’s primary cryptocurrency, Ether (ETH), is heading towards its first monthly loss in October since the year 2018. Over the past 30 days, it has dropped by 5.40%, reaching a price of $2,475 on October 27th.
The decrease is being fueled by increasing competition from emerging smart contract platforms such as Solana (SOL), along with a lukewarm reception in the market towards Ethereum-based spot ETFs.
As a researcher delving into the Ethereum market, I’m noticing an uptick in positive signals suggesting a possible reversal for Ether. Various factors seem to be aligning, hinting at a potential path towards recovering the $6,000 mark.
Ether holds support that last preceded 160% gains
Right now, Ether’s value is hovering above an important support zone near $2,400. This significant level aligns with the lower boundary of ETH’s multi-month uptrend channel. Historically, this line has preceded substantial price increases, such as the cryptocurrency’s over 160% surge from October 2023 to March 2024.
Should the $2,400 level hold strong, it’s possible that Ethereum could approach the upper limit of its current trend within the next few months, with an estimated value close to $6,000.
As an analyst, I’m observing a positive development in the Ethereum market. The weekly Relative Strength Index (RSI), a key indicator, has rebounded from a historically significant support level. This event coincides with Ether’s recent test of the lower trendline of its channel, further reinforcing the bullish sentiment.
As a researcher, I’ve observed that when the Ethereum (ETH) price has dipped and found support at certain levels in the past, it has often bounced back robustly, triggering significant uptrends.
$1.3B in ETH exits Coinbase
As a researcher examining cryptocurrency trends, I’ve noticed an uptick in Ethereum withdrawals from Coinbase as per the data presented by CryptoQuant analyst Burak Kesmeci. This could indicate a possible surge of institutional interest in Ethereum.
On October 25th, within an hour, an unidentified party withdrew approximately 543,000 Ethereum (ETH), worth more than $1.3 billion, from a cryptocurrency exchange. This transaction represents one of the largest transfers of Ether in the past three months.
Massive transactions are frequently viewed as indications of significant institutional involvement. When big investors transfer considerable quantities of cryptocurrency away from exchanges, it usually suggests a move towards long-term investment plans, potentially hinting at optimistic market expectations.
Kesmeci pointed out that the significant withdrawals of Ether might signal an upcoming price surge, referring to a separate incident happening in August 2024 where approximately 681,100 ETH valued at around $1.8 billion left the Coinbase platform.
“This being the second such outflow in three months strongly suggests the possibility of growing institutional interest.”
Ethereum eyeing key reversals versus top rivals
The possible increase in Ethereum’s value up to $6,000 could be further fueled by investors shifting funds away from its main competitors such as Bitcoin (BTC) and Solana.
Looking at the technical aspect, Ether’s current trade is near its long-term upward trendline support when compared to Bitcoin. This, combined with its oversold Relative Strength Index (RSI), suggests that a significant price increase could occur in the upcoming months.
The analyst Crypto points out that in the past, rebounding trends from this specific trendline support line often signal the start of an “altcoin rally,” a period where alternative cryptocurrencies tend to surpass Bitcoin’s performance.
“The strengthening of ETH against BTC results in the rise of altcoins,” the X user noted, adding,
“Altcoins are currently very cheap and will soon forget these levels.”
Ethereum versus Solana further hints at capital rotation
In simple terms, the value of Solana, Ethereum’s main competitor, has skyrocketed by nearly 9 times (approximately 900%) when compared to Ethereum in their trading pair, from June 2023. As of October 27th, the SOL/ETH pair reached an all-time high of 0.0710 ETH.
Regardless, their weekly Relative Strength Index (RSI) has risen beyond 70, implying they are now overvalued. This means that Solana might have climbed too steeply in relation to Ether and could potentially encounter a decline due to increased selling pressure.
The decreasing interest in Solana relative to Ethereum, as shown by the bearish divergence and declining RSI and trading volumes, suggests that the price of Solana may drop due to reduced buying pressure. Historically, when markets become overextended like this, Solana’s value has tended to decrease towards its 50-week moving average, potentially leading to a decline of approximately 35%.
As a crypto investor, I firmly believe that the current rotation of funds is setting us up for an optimal situation where Ethereum could potentially surge towards the $6,000 mark by the end of 2024 or early 2025.
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2024-10-27 18:21