Ethereum (ETH) has seen a 10.3% drop from last week’s highs following the recent market downturn. Its performance has worried many analysts and investors, considering ETH could be near another correction.

Related Reading

Ethereum Whales Send Millions To Exchanges

Ethereum has struggled to reclaim some key resistance levels since the October 1 correction. On Tuesday, the cryptocurrency saw its price nosedive from the $2,600 zone to the $2,300 mark, hovering between the lower and higher range of that support level for the past few days.

Since then, news of multiple investors moving their tokens has hit the industry, alarming the community. On-chain analytics firm Lookonchain revealed that an Ethereum Initial Coin Offering (ICO) participant sold their tokens as the market bleed.

Per the report, the whale deposited 12,010 ETH, worth $31.6 million, to Kraken a week ago after being inactive for two years. The same address sold another 19,000 ETH two days ago, around $47.54 million.

Today, crypto analyst Ali Martinez highlighted that on October 3, roughly $259.2 million worth of ETH had been sent to crypto exchanges. According to the CryptoQuant data shared by Martinez, 108,000 ETH were sent to exchanges in the last 24 hours, significantly increasing from the day before.

The news continued to fuel the bearish sentiment among many community members, who are disappointed about Ethereum’s performance and fear ETH’s price could soon face significant selling pressure.

Will ETH Revisit Lower Levels Soon?

Crypto investor Ted Pillows noted that ETH has been “one of the most underperforming cryptos in 2024.” Despite the approval of Ethereum spot ETFs (exchange-traded funds), the crypto has “underperformed almost every large cap.”

He also pointed out that ETH surged alongside Bitcoin whenever the market was up but dropped significantly harder when the market struggled. “Whenever BTC has pumped 5%, ETH has pumped 3%, but whenever BTC has dumped 5%, ETH has dumped 12%-15%,” he remarked.

However, Ted explained that every time Ethereum was considered “dead,” like in 2020-2021, it has eventually outperformed BTC. Based on this, the investor believes that ‘the king of Altcoins’ could face “one last flush” to $2,200 before the reversal.

Similarly, trader Crypto General suggested that the cryptocurrency could retest the $4,000 by next month as he expects ETH to bounce from the current levels. However, he asserted that if the price breaks the trendline, “we can easily see the price touching the $2100 level.”

Related Reading

Other market watchers pointed out that Ethereum must reclaim the $2,400 resistance level to see a potential bounce toward $2,800. Previously, Daan Crypto Trades set the $2,850 resistance level as one of the key levels to watch.

The analyst considers that reclaiming this level would signal a trend reversal for the cryptocurrency. This zone corresponds with the horizontal level that started the February-March run to ETH’s yearly high of $4,090.

As of this writing, ETH has seen a positive price jump, currently trading at $2,431. This performance represents a 4.3% surge in the daily timeframe.

Featured Image from Unsplash.com, Chart from TradingView.com

Ethereum is down when writing, mirroring the general performance across the board. The nearly 2% drop in the crypto scene is due to the contraction of Bitcoin, Ethereum, and top altcoins. At present, the total market cap is down to $2.17 trillion. It could post even more losses should bears press on, reversing the gains of September.

Ethereum Under Pressure, Will $2,350 Offer Support?

In the last week alone, CoinMarketCap data shows that Ethereum is down 10%, pushing losses below $2,400, a former support, now resistance. While it could appear that the sharp dump of the better part of this week is discouraging participation, some traders are accumulating at around spot rates.

Related Reading

IntoTheBlock data on October 3 shows that 1.89 million Ethereum addresses bought 52 million ETH at around the $2,311 and $2,383 range. That a large amount of buyers choose to buy, on average, at $2,350 means this is a support level that traders should closely watch.

Considering the number of ETH accumulated, sellers would need to exert more effort to break below this level, forcing the coin towards $2,100 and August lows. Comparing traders’ action and the September range, the $2,350 level falls at around 61.8% and 78.6% Fibonacci retracement levels.

What’s Next For ETH?

Technically, crypto prices, including ETH, tend to find support around this Fibonacci retracement zone. Accordingly, how prices react between the $2,100 and $2,350 zone will likely shape the medium to long-term trend.

Related Reading: What’s Holding Bitcoin Back? Analyst Says $71,000 Is The Magic Number

A refreshing bounce around this emerging support and Fibonacci retracement zone would be a massive boost. In this case, ETH could rally, even above $2,800, as bulls target $3,500.

Conversely, any sharp dump below August and September lows may easily trigger panic selling. Out of this, ETH can slump below $2,100 and $2,000 and may fall to as low as $1,800, confirming losses of early August.

Considering the state of price action, sellers have the upper hand. Over the past few trading sessions, centralized exchanges have had massive outflows.

Earlier today, The Data Nerd revealed that Wintermute, a crypto market maker, moved 14,221 ETH to Binance, indicating that they might sell. In August, Wintermute and other leading market makers, including Jump Capital, sold over 130,000 ETH, forcing prices lower.

Feature image from DALLE, chart from TradingView

Popular crypto analyst Il Capo of Crypto has returned to social media platform X after over two months of hiatus to drop an interesting outlook for Bitcoin and Ethereum in the coming months in light of the recent correction since the beginning of October. The analyst, which has been so big on a looming altseason since the beginning of the year, has revealed a bearish outlook for Bitcoin and even Ethereum (king of altcoins) in the short term.

Known for his sometimes controversial and often contrarian predictions, Capo returned just as the market experienced a notable correction in October, sharing his bearish outlook for both Bitcoin and Ethereum. His latest prediction is that Ethereum could plummet as low as $1,800 before seeing any substantial recovery.

ETH’s Predicted Decline

Ethereum has already dropped by 10% in the past seven days and is currently trading around around $2,330, but according to Capo, this decline could worsen. He predicted that ETH might fall further into the $1,800 to $2,000 range, which is a possible 23% dip from its current price, before eventually rebounding. However, he believes an altcoin season will still materialize. 

Related Reading

Quick update:

There’s a possibility of one last shakeout, with $BTC testing the $48k-50k zone and $ETH $1.8k-2k, before the real altseason begins.

If that happens, I’ll be adding more to my altcoin bags. https://t.co/sx6u8wPNrK

— il Capo Of Crypto (@CryptoCapo_) October 2, 2024

Capo’s track record of analysis since the beginning of the year shows a consistent belief in the upcoming dominance of altcoins. Throughout 2024, he has repeatedly emphasized the potential for altcoins, particularly Ethereum, to outperform Bitcoin as profits generated from BTC flow into smaller assets. However, the altcoin season has yet to materialize, and Bitcoin has continued to dominate the crypto investment scene.

Time To Go Long On Ethereum?

It’s worth noting that Crypto Capo’s predictions often have a certain lore attached to them. There is a running joke among some investors that whenever Capo makes a prediction, the market tends to do the opposite. This goes as far back as his prediction of Bitcoin falling to $12,000 last year, but the crypto eventually broke past resistance levels. Now, with Capo predicting the possibility of continued decline for Ethereum and Bitcoin amid October’s bullish market sentiment (often dubbed “Uptober”), it raises the question from many investors if his bearish call is far-fetched.

Related Reading

Only time will tell if the market plays out according to Capo’s analysis. However, given the current inflow of investments and the crypto market, which has mostly rallied in October, it wouldn’t be surprising if Ethereum rebounds rather than experiences the significant drop Capo is forecasting.

Naturally, many savvy whales and traders have seen the current decline as an opportunity to “go long” and accumulate more Ethereum in expectation of the resumption of inflows. This sentiment is reflected through the US Spot Ethereum ETFs, which witnessed $14.45 million in inflows yesterday despite the price correction.

Interestingly, it is important to note that Capo’s analysis is only talking about a possible case and remains bullish for Ethereum in the long term. 

Featured image created with Dall.E, chart from Tradingview.com