Highlights:
- Ethereum is trending towards the $2505.9 support after losing the $2721.2 resistance
- A bounce off the $2505.9 resistance could trigger a rally back to $3000
- A market-wide rally could trigger such a bullish reversal for Ethereum
Ethereum is in the red today, continuing the sell-off that started three days ago. At the time of going to press, Ethereum was trading at $2581.08, down by 1.89%. Trading volumes are also in decline, down by 14.69% to hit $14.18 billion in the day.
Advertisement
Ethereum’s price action is a pointer to the increased weakness of a cryptocurrency that has struggled to retest its all-time highs this cycle so far. While Bitcoin has hit its all-time highs and has made several attempts at it again recently, Ethereum is struggling to even retest $3000. This has led many investors to wonder, which way for Ethereum in the short term.
Things Could Get Worse Before They Get Better for Ethereum: Analyst
Some analysts believe that things could get worse before they get better for Ethereum. According to a cryptocurrency analyst named Benjamin Cowen, Ethereum could see a price collapse as the US starts to cut interest rates. Cowen’s logic is based on Ethereum’s price action in 2019 when something similar happened.
In his worst-case prediction, Cowen believes Ethereum could be headed to a low of $1000, a price level that is in line with the logarithmic regression band. In his view, the ETH/USD pair could continue dropping for the better part of Q4. However, in a sign of optimism, Cowen believes that the ETH/BTC after more than a year in the red could have bottomed out.
The same thing happened in 2019 before Ethereum entered a parabolic price run. This, he says, could usher in an Ethereum bull run in 2025, though the selloff could remain strong for the remaining months of 2024.
More Whales Buying Ethereum
However, there are more short-term optimistic signals out there for Ethereum as well. One of them is that despite months of selloff, the selling pressure on Ethereum is in decline. There is also the fact that there has been an upshot in the number of whales buying Ethereum. Even more bullish for Ethereum is that whales buying it are increasingly taking it out of exchanges, signaling that they have a long-term view of the market.
For context, in the last 48 hours, more than $80 million in Ethereum has been taken out of exchanges and into cold storage. There is also the fact that the number of people holding over $1 million worth of Ethereum is on the rise. This is a pointer that despite the disappointing price action in the short term, more wealthy investors believe in Ethereum as a cryptocurrency worth holding in the current crypto cycle.
Ethereum ($ETH) accumulation addresses have surged by 7.5 million since January, with over 19M $ETH lying idle. Many analysts predict that the number could surpass 20M by year-end.
This signals a growing HODL mentality among investors. 📈 #Ethereumhttps://t.co/vMsw4zr2T0
— Techreport (@thetechreport) October 22, 2024
Technical Analysis – Ethereum Price Trending Towards Critical Support
From the charts, Ethereum reflects the views of most analysts that it could experience a correction in the short term before a parabolic price moves in the long term. On the day chart, Ethereum is currently in a minor correction after failing at the $2721.2 resistance on October 20.
This correction could continue until Ethereum tests the multi-week support at $2505.9. A bounce off the $2505.9 resistance could mark the end of the current correction. Such a bounce could be supported by a Bitcoin reversal and rally through its resistance levels. If Ethereum bounces off the $2505.9 support and rallies through the $2721.2 resistance, then $3000 could be an easy target in the short term.
On the other hand, if bears take control and push Ethereum through the $2505.9 support, then a selloff could follow. In such a scenario, a drop to prices as low as $2000 could be a realistic possibility in the short term.
A Recap on Ethereum Price
Of these scenarios, the odds are higher that Ethereum could drop to $2505.9 before a reversal to $3000 or higher follows. That’s because while Ethereum selling pressure is still high, it is in decline, which means support could hold. At the same time, Bitcoin correction is slowing down, which means the broader market could be headed for another leg up in the short term.
Advertisement
