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Ethereum Could Gain 10% Before ETH Resumes Its Reversal
With the latest price drop in the first half of this month, Ethereum has reached a new low. Ethereum, as of late, has been estimated to be worth around $1,420. Ethereum’s future, though, appears to be gloomier at the moment.
The current price of one ether is below the 61.80 Fibonacci level, which is somewhere around $1,340 at the time of this writing. Any progress made since early September has been lost in the recent market downturn.
The coin still has some chance of being salvaged, though. There has been a lot of volatility in the financial markets since the market crash on September 13 in response to the CPI report and interest rate hike.
In response to the recent negative developments in the U.S. economy, stock prices and cryptocurrency prices fell precipitously. However, Ethereum has a chance of gaining 10% before it resumes its backward motion.
On Jittery Traders & Federal Reserve Rate Hikes
Fear has spread among traders and investors due to the combination of historically high inflation and the Federal Reserve’s quantitative tightening initiatives, which center on a potential 1% interest rate hike.
The market’s reaction to this newfound anxiety was a precipitous drop almost instantly. The price decreased by 26.02 percent from the 10th to the 18th of September, effectively erasing the purported recovery seen in late August.
There are two possible ways for the price of Ethereum to recover: 1- investors will “buy the dip” in response to a price decline, or 2- investors will “HODL” until the price recovers to normal.
Scenario one is more probable, as buying the dip will result in a profitable investment for traders. With the Stoch RSI indicators providing strong oversold signals, it is possible for the market to see increased purchasing activity as anxieties recede.
Recent market movements are also consistent with the XABCD harmonic pattern. This can be a buy signal for traders, resulting in a 10 percent price increase relative to the present price movement.
Second Scenario Might Lead To Another Pain For Ethereum
If Ethereum is ever to rebound, bulls must generate and maintain sufficient momentum to overcome the current market’s worries.
The momentum must also surpass the 1,467 price range, as failure to do so will impede future uptrends.
The support for this hypothetical bull rebound is $1,243. Any downturn from that point can provide the bears with sufficient momentum to break the 78.60 Fib level. This could be the case if market confidence is not restored.
Buyers and holders of Ethereum should also monitor other currencies. With a correlation value of 0.72, any additional decline in Bitcoin’s price will prompt a sell-off in Ethereum and other altcoins.
ETH total market cap at $163 billion on the daily chart | Source: TradingView.com
Featured image from Crypto Basic, chart from TradingView.com
(The analysis represents the author’s personal views and should not be construed as investment advice).
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