Ethereum’s $2,400 support level and recent institutional interest due to significant outflows point to the possibility of a strong rebound towards $6,000. Competitive dynamics, including potential capital rotation from Solana and Bitcoin, could further support Ethereum’s bullish trajectory.
Ether (ETH) lost 5.4% in October for the first time since 2018, consistent with recent developments discussed in the CNF update on Ethereum’s position as the backbone of the decentralized financial system through Layer 2 and Layer 1 solutions. It is expected that this will be incurred. As of October 27th, it has fallen to $2,475.
Currently, Ethereum (ETH) price is $2,523.42, up 1.96% and down 6.28% over the past week.
This decline is driven by increased competition from emerging smart contract platforms such as Solana (SOL) and a lackluster response to Ethereum-based spot ETFs. Nevertheless, multiple indicators suggest that ETH could recover to $6,000 in the coming months.
Support and organizational activity suggests potential for upside.
ETH maintains support near $2,400, a level that has historically seen sharp recoveries, including a 160% rally from October 2023 to March 2024. This support is consistent with ETH’s multi-month ascending channel pattern, indicating that it could be on an upward trajectory if held.
Furthermore, interest from institutional investors seems to be increasing, as evidenced by the massive outflow of 543,000 ETH (equivalent to $1.3 billion) from Coinbase on October 25th. CryptoQuant analyst Burak Kesmeci suggests that such large withdrawals often indicate institutional investor interest and long-term holding strategies. This could be a sign of rising prices.
Additionally, Kesmeci cited another transaction in August 2024 in which 681,100 ETH worth $1.8 billion was leaked from the Coinbase exchange, suggesting that a large ether outflow could be a harbinger of price increases. he pointed out.
“This is the second such outflow in the last three months and strongly suggests that institutional investor interest may be increasing,” Keshmeshi said.
Competitive changes favor Ethereum
Ethereum price could also benefit from capital circulation from competitors such as Bitcoin and Solana. Ether is trading near the historical uptrend line against Bitcoin, suggesting a potential rebound as the oversold situation eases. Past pullbacks from this trendline have often been the start of an “altcoin season” in which alternative cryptocurrencies outperform Bitcoin.
In the Solana market, the SOL/ETH pair recently hit new highs, but the weekly RSI is in overbought territory. This suggests that Solana’s momentum may slow, leading to a 35% correction towards the 50-week EMA. As capital circulates out of overbought assets like SOL, Ethereum could gain momentum and reach the $6,000 level by the end of 2024 or early 2025.
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