As of today, Ethereum (ETH) is trading at $2,600, following a nearly 5% drop since its recent swing high on September 27. This downtrend mirrors Bitcoin’s 5% crash over the past day. After a lackluster performance last week, where Ethereum managed to rally by 10%, its short-term outlook now appears uncertain. Nevertheless, as the crypto markets enter the fourth quarter, the mid-to-long-term outlook remains intact. The pressing question for investors is: will Ethereum’s price touch the coveted $3,000 mark in October?
A Bullish Technical Analysis
Despite the recent downturn, technical and on-chain analyses indicate a favorable scenario for Ethereum to test the psychological $3,000 level. Market watchers can expect ETH not only to approach this level but potentially to exceed it, eyeing a revisit to the $3,500 resistance. Historical data shows that October and the fourth quarter typically offer bullish trends for cryptocurrencies, supporting a positive outlook for Ethereum. However, a short-term correction may precede any advance toward $3,000.
Why Is Ethereum Down Today?
Ethereum is experiencing a 1.92% decline today, attributed primarily to Bitcoin’s sudden drop from a high of $66,000. Nevertheless, the overall sentiment remains bullish. Bitcoin’s recent breakthrough of a six-day consolidation at a critical resistance level of $65,000 contributed to a significant uptick in Ethereum and other major altcoins, which surged in double digits within days.
Additionally, with the bearish third quarter ending, there’s reason to believe Ethereum could sustain its upward trajectory despite the current dip. Historically, month-end price actions tend to be volatile, which could explain the 5% drop in ETH over the past three days, following a 10% rise in the previous two weeks.
Short-Term Correction on the Horizon
Despite the bullish long-term outlook, on-chain metrics suggest that Ethereum is due for a short-term correction. According to Santiment’s 30-day Market Value to Realized Value (MVRV) ratio, currently hovering around 6.5%, historical trends show that entering the 6% to 10% range often leads to price reversals, even in uptrends. Thus, a correction may be imminent.
This potential pullback could occur over the weekend or in the following week, allowing Ethereum’s price and the MVRV ratio to rise into the danger zone, potentially leading to a stronger correction.
Ethereum’s daily price chart reveals it is trading within a range of $2,309 to $2,820. Investors should pay close attention to the September 23 swing high at $2,702. If buyers fail to maintain momentum around this level, it could trigger a swing failure pattern, leading to a price correction.
A downturn could see Ethereum revisit the $2,252 to $2,440 demand zone, a crucial buy zone heading into the fourth quarter. Given that October historically yields gains, this dip could be a buying opportunity for investors looking to capitalize on the expected upswing.
If Ethereum manages to flip the range high at $2,820 after a 15% move, further gains could lead to a retest of daily and weekly hurdles at $2,886 and $2,923, respectively. Seasonal trends suggest that a retest of the $3,000 psychological level is quite feasible.
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Consolidation between $2,800 and $3,000 would signal that buyers are serious about pushing ETH higher. A breakout from this range could trigger a swift move toward the next critical hurdles at $3,352 and $3,497.
In summary, while Ethereum may be facing a short-term correction, the outlook for the month ahead appears significantly more favorable than it did just a month ago. With a price forecast hinting at a retest of the $3,000 level—potentially extending to $3,500—investors should remain patient and vigilant to take advantage of the forthcoming opportunities in the crypto market.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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