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The recent price action of Ethereum saw the digital currency hitting a low of $2,150 on September 6, sparking concerns of a potential further drop towards the $2,000 mark. However, these concerns were alleviated when Ethereum bounced back to $2,460 on September 13. Despite this recovery, Ethereum remains predominantly in a downtrend, with a triple-bottom price formation beginning to take shape.
Interestingly, this triple-bottom formation is not unfamiliar territory for Ethereum. Technical analysis indicates that the current price action mirrors a similar pattern seen in mid-2021.
Ethereum Fractal Suggests Rally In Q4
According to a technical analysis by crypto analyst CryptoBullet on the social media platform X, Ethereum is on track to form a triple-bottom price formation on the 1D candlestick time frame. While the completion of the third bottom is pending, the analyst points out a resemblance to a pattern that unfolded between June and August 2021.
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During that period, Ethereum’s price fluctuated to create three distinct lows just above the $1,675 mark. Following the establishment of the third low, Ethereum experienced a significant bullish rally that led to breaking through and setting a new all-time high. This uptrend gained momentum after a fractal pattern emerged in August 2021, signaling a strong shift in sentiment.
Recent market dynamics have seen Ethereum forming two bottoms around $2,150 in August and September. A recent rejection at the $2,450 resistance level has resulted in Ethereum trending downwards. As a result, analyst CryptoBullet suggests the possibility of a third low in October to complete the triple-bottom formation.
Price formations in the cryptocurrency market often repeat over time, following patterns that help traders anticipate future movements. While each market condition is unique, studying past price actions provides valuable insights into potential future trends. A repeat of the 2021 price action scenario could lead to a surge in Ethereum’s price in Q4 2024, with the analyst projecting a rally towards the $3,700 level.
What’s Next For ETH?
Currently, Ethereum is trading at $2,320 and shows a weak short-term outlook. Failure to surpass the $2,340 resistance level could trigger another decline towards $2,150.
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The underperformance and weak outlook of Ethereum are more pronounced when compared to Bitcoin. As a result, the Ethereum/Bitcoin pairing is currently at its lowest level since April 2021, marking a 41-month low. The lackluster performance has been exacerbated by sell-offs from a few major holders, including Ethereum co-founder Vitalik Buterin, who faced scrutiny for selling $2.2 million worth of Ethereum.
Featured image created with Dall.E, chart from Tradingview.com