Ethereum’s native token, Ether (ETH), has just pulled off a jaw-dropping comeback after plummeting to its lowest point in eight months on August 5. But here’s where it gets interesting: this sudden resurgence bears an uncanny resemblance to a fractal pattern we witnessed back in October 2023, which ignited a staggering 178% price explosion.
Could This Be the Bottom for ETH?
As of August 6, the Ether market is buzzing with excitement as the price exhibits clear signs of a bullish reversal. It rebounded from a crucial support confluence that includes the lower trendline of its prevailing ascending channel and the 200-week exponential moving average (200-week EMA), marked by that striking blue wave.
This isn’t just a random blip; it’s accompanied by a notable uptick in Ether’s weekly relative strength index (RSI), which climbed from 39.40—over nine points above the dreaded oversold threshold.
When we take a step back, the technical indicators paint a strikingly similar picture to October 2023. Back then, supportive fundamentals, including the exhilarating pre-halving rally and the much-anticipated launch of Bitcoin ETFs, propelled ETH toward the upper trendline of its ascending channel.
If this fractal plays out as anticipated, it suggests that Ether has indeed bottomed at that August 5 low of approximately $2,128 and is now gearing up for a thrilling ascent towards the channel’s upper boundary, projected around $4,560. To put it simply, if ETH moves as expected, we could be looking at a breathtaking 100% rally by 2024!
Rate Cuts: The Catalyst for Ethereum’s Ascent
From a broader economic standpoint, the looming potential for interest rate cuts by the United States Federal Reserve could provide a significant tailwind for Ethereum. As traders eye higher returns from riskier assets, we could see a mass exodus from the safety of lower-yielding options like government bonds.
Recent murmurs from bond traders indicate that they believe the US economy is deteriorating at such an alarming rate that the Fed might have no choice but to implement aggressive rate cuts before their next meeting, all in a bid to stave off a recession. The narrative has shifted—fears of high inflation are giving way to worries about economic slowdown.
Current estimates show a 60% chance of an emergency 0.25% rate cut within a week, according to Bloomberg. Moreover, data from CME suggests increasing odds for a total of three rate cuts by the end of 2024.
It feels like déjà vu, reminiscent of March 2020, when the market staged a sharp rebound following the Fed’s intervention in the wake of the COVID-19 market crash.
As market analyst Milkybull Crypto astutely noted about the broader altcoin landscape, “The final capitulation indeed hit that lowest point, just as it did in 2020, signaling a bottom.” They further emphasized, “I don’t think this time is different.”
Could we be on the brink of another exhilarating ride in the crypto world? Only time will tell, but one thing’s for sure: the stage is set for Ethereum to make its next bold move.