The cryptocurrency market, led by the largest cryptocurrencies Bitcoin (BTC) and Ethereum (ETH), surged on Tuesday to levels not seen in over a month in anticipation of the Federal Reserve’s (Fed) imminent announcement of its first interest rate cut since the COVID-19 pandemic.
However, despite these expectations or what the outcome of the Fed’s announcement might have on the market, in Bitcoin halving years, Q4 (fourth quarter) is typically significantly bullish for the two largest digital assets and the broader market.
Exploring Ethereum’s Price Performance After Bitcoin’s Halving
Interestingly, Ethereum’s performance after previous Bitcoin halving events has shown notable variations. Data reveals that in the year following the 2016 halving, Ethereum suffered a 45% drop before embarking on a remarkable recovery that culminated in a 3,400% increase.
Similarly, after the 2020 halving, ETH surged 150% before skyrocketing to a 2,150% gain. However, since the last halving in April, ETH has mirrored that of Bitcoin. volatilityexperiencing notable price fluctuations and establishing lower support levels.
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The recent month has not been kind to Ethereum, marked by two significant drops. On August 5, ETH pulled back more than 25%, falling to a six-month low of $2,110. The downward trend continued into September, with increased selling pressure leading to a drop from $2,800 to around $2,150 in just one week.
Despite these challenges, the CryptoBullet analyst remains optimistic about the potential for a fourth-quarter recovery. Notably, the analyst identified a “triple bottom” formation on the ETH/USDT daily chart, see image below, reminiscent of the price action seen in 2021.
This pattern suggests that Ethereum may be poised for a similar recovery to the one seen in 2021, when it rose from around $1,650 to its all-time high of $4,730. However, currently trading at approximately $2,330, Ethereum is down more than 52% from its previous all-time high.
ETH Price Analysis
Predicting more ETH price volatility on Wednesday ahead of the Fed’s upcoming rate cut, there is main levels monitor. Last week, ETH established the $2,260 mark as a significant support level. This price is crucial as it could act as a buffer against a further decline towards $2,200 or even a retest of the next major support at $2,100.
On the upside, the 50-day exponential moving average (EMA) is currently positioned at $2,350, serving as a formidable barrier for Ethereum. This resistance level has prevented the cryptocurrency from retesting the $2,400 mark in the near term.
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If ETH can break through these resistance levels, bullish investors will be eyeing the next big one. resistance for $2,520. Just above this level is another critical hurdle at $2,620, where the 200-day EMA is situated. This level has not been surpassed since July this year, when the price of Ethereum fell below it, starting the current downtrend.
Featured image of DALL-E, chart from TradingView.com