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ETH price is about to rebound, can the bull market break through 6000?

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团子财经
2 days ago
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Ethereum (ETH) has fallen 5.4% since early October and reached $2,490 on October 28, the first October decline since 2018. The reason for this decline is the increasingly fierce competition from new smart contract platforms such as Solana (SOL). The market's response to Ethereum-based ETFs has been sluggish.

VX: TTZS6308

Ethereum Maintains Support, Previously Up 160%

However, many indicators suggest that Ethereum may recover to the $6,000 level. Currently, Ether is still above the key support level of around $2,400, consistent with the downtrend line of the ETH's monthly upward channel pattern. Historically, this price level often leads to a significant upswing, including a gain of over 160% from October 2023 to March 2024.

If the $2,400 support level holds, ETH may target the upper edge of this channel in the coming months, approaching the $6,000 level. Additionally, Ethereum's weekly RSI has also recovered from the historical support area, coinciding with ETH testing the lower trend line of this channel.

Withdrawing $1.3 Billion ETH from Coinbase

A large amount of Ether has recently been withdrawn from Coinbase, indicating strong institutional interest.

On October 25, an anonymous entity withdrew 543,000 ETH, worth over $1.3 billion, in just one hour, one of the largest transactions in the past three months. These large-scale movements are often seen as a sign of institutional activity and may signal a bullish trend.

This large-scale ETH withdrawal may be a signal of an impending price increase, similar to a transaction in August 2024 when 681,100 ETH worth $1.8 billion left Coinbase.

Ethereum Faces Significant Reversal Against Top Competitors

The flow of funds from top competitors such as Bitcoin (BTC) and Solana (SOL) may drive Ethereum to $6,000.

Technically, Ethereum is currently trading around the long-term uptrend line of Bitcoin. Meanwhile, the RSI is in oversold territory, which may trigger a strong price recovery in the coming months.

ETH/BTC bouncing off this trend line often coincides with the "Altcoin season", a period when Altcoins outperform Bitcoin.

Ethereum vs. Solana Suggests Capital Flows

Ethereum's next major competitor Solana has risen about 900% relative to the SOL/ETH currency pair since June 2023. As of October 27, the SOL/ETH currency pair reached a new record high of 0.0710 ETH.

However, the weekly RSI of this currency pair has broken above the 70 threshold, indicating that Solana is in overbought territory. This means that Solana's rate of increase may be too fast compared to Ether, and it may face downward pressure.

The bearish divergence in the SOL/ETH currency pair, along with the decline in RSI and trading volume, suggests that buying pressure is weakening, and the price may correct. Historically, overbought conditions often lead the SOL/ETH currency pair to the 50-week moving average, indicating a potential decline of around 35%.

The convergence of these capital flows creates a favorable environment for Ethereum, allowing it to approach its $6,000 target by the end of this year or early 2025.

Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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