Ethereum lost a considerable amount of its value over the last two months. It retraced by more than 20% from its peak in August. With this in mind, many traders expect a full recovery this month.
Before the start of the current 30-day period, the standing sentiment of “BTC always performs better in October” gained a lot of ground. Unfortunately, price action during the first two days dampened this resolve.
Nonetheless, ETH just recorded its first green following two reds. Many may conclude that this may be the start to another bullish round, while others are on the fence but hoping prices improve. What factors could affect the largest altcoin’s performance this month?
Fundamentals
As usual, the first on the list are fundamentals. From the previous 30-day period, we saw how the lack of bullish news played out. Unfortunately, there are no foreseeable stories that may positively affect price action.
Additionally, there are no upcoming events. Nonetheless, external events like the Federal Reserve Board meetings may cause FUDs or FOMO and there is none slated for October. We may conclude that the second largest cryptocurrency may follow previous trends.
Ethereum is Bound to See More Uptrends
Historically, October is a month that offers solace to traders after massive downtrends in September. The image below confirms this claim. We noticed a sharp contrast between both months when we pay more attention to the averages.
Since its introduction to the market in 2015, six years have passed. Of these Octobers, ether recorded significant losses in just two and was bullish in four. The highest it gained during this period is 43% while the largest loss is 17%.
On average, the largest altcoin gains 4.7% every October. There is no doubt that the tenth 30-day period of the year is favorable.
Based on the average, we may expect ether to gain more than 4%. Although this figure seems meager, it is the most realistic. This means that the coin is gearing up for massive price action. Let’s see what the charts say.
Ethereum is at Crossroads
It is important to bear in mind that ether’s performance may be highly dependent on chart patterns. Looking at the asset from a long-term point of view, we may conclude that it is at a very crucial point.
The chart above is a 1-week timeframe. A closer look at the chart reveals a bear flag. This means that the asset under consideration is gearing up for an uptrend. it is possible that ether has bottomed out or may have another bearish round before the breakout.
Ether of the highlighted scenarios taking place spells goodwill for the altcoin. We may expect another period of downtrends but recovery is almost certain provided ETH follows the price pattern.
A closer look at the indicators on the weekly chart hints at the apex alt experiencing notable retracement. For example, the Moving Average Convergence Divergence shows a near interception between the 12-day EMA and the 26-day EMA.
A bearish divergence may spark another round of downtrends. How this may last or dip will the asset under consideration dip remains a question only time will answer. Nonetheless, we noticed RSI ranging around 40 following price movements. However, readings from the daily chart tell a different story.
Ether Shows More Potential on 1-day Chart
The readings in the weekly charts may not be as bullish as many would expect. Nonetheless, the daily chart shows more potential. For example, MACD had a bullish divergence and is currently maintaining its momentum.
However, it showed signs of a bearish divergence but is back on track as a result of the most recent price increase. Based on this phenomenon, we expect more price increases. Affirming this prediction is the Relative Strength Index.
The metric also resumed its upward drive as a result of the positive change in value the coin experienced. Ether is also edging to retest its pivot point. All these readings beg the question of how high or low the largest alt go.
Levels to Watch
Key Support: $1,200, $1,000
Key Resistance: $1,600, $1,800, $2,000
The highlighted levels are possible marks the second largest token may test. In the event of a retracement, we may see selling congestion at $1,300. Nonetheless, a massive correction may see this level flip.
If that happens, one of the key marks to watch out for is the $1,200 support. We observed several attempts at the mark last month. However, none yielded results, making it a tough barrier traders can bank on.
It may take a massive bearish fundamental or FUD to see $1.2k flip. Nonetheless, if it does, we may expect the downtrend to end at or around the $1,000 support. We’ve seen this happen on several occasions and we may see history repeat itself.
On the flip side, ETH may pick up momentum. If this happens, the main aim will be to retest the $2k resistance. There are several obstacles to this bid. The first is the $1,600. Although not one of the toughest barriers, the asset under consideration remained under it for more than fourteen days.
We may expect an easy flip. This will open the $1,800 barrier to attack. We may expect several attempts before it breaks. Based on previous price movements, to flip the highlighted mark, there must be an accumulation phase between $1650 and $1,750.
Once the $1,800 resistance flip, it is almost guaranteed that we may see an attempt at $2,000. The recent price movement backed this claim as we noted that there was almost no opposition to such trial.
