This article is also available in Spanish.
The cryptocurrency market, led by the largest cryptocurrencies Bitcoin (BTC) and Ethereum (ETH), surged to levels not seen in more than a month on Tuesday 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 announcement might have on the market, in Bitcoin halving years, the fourth quarter (Q4) is typically significantly bullish for the two largest digital assets and the broader market.
Exploring Ethereum Price Performance After Bitcoin 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 saw a 45% decline before embarking on a notable rally that culminated in a 3,400% increase.
Similarly, after the 2020 halving, ETH surged 150% before climbing to 2,150%. However, since the last halving in April, ETH has mirrored Bitcoin’s trend volatilityencountering notable price fluctuations and establishing lower support levels.
Related Readings
The past month has not been kind to Ethereum, marked by two major crashes. On August 5, ETH declined by more than 25%, falling to a six-month low of $2,110. The downward trend continued into September, with increased selling pressure causing a drop from $2,800 to around $2,150 in just one week.
Despite these challenges, CryptoBullet analyst remains optimistic about the potential for a fourth-quarter turnaround. Notably, the analyst identified a “triple bottom” formation on the ETH/USDT daily chart, visible in the image below, reminiscent of the price action seen in 2021.
This pattern suggests that Ethereum could be poised for a rebound similar to the one seen in 2021, when it rose from around $1,650 to its historical record of $4,730. Yet, currently trading at around $2,330, Ethereum is more than 52% below its previous all-time high.
ETH Price Analysis
Predicting further ETH price volatility on Wednesday ahead of the next Fed rate cut, there is key levels to watch. Over the past week, ETH has established the $2,260 mark as an important support level. This price level 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 positive side, the 50-day exponential moving average (EMA) is currently positioned at $2,350, providing a formidable barrier for Ethereum. This resistance level prevents the cryptocurrency from retesting the $2,400 mark in the near term.
Related Readings
If ETH manages to break through these resistance levels, bullish investors will look to the next big thing resistance at $2,520. Just above this level lies another critical hurdle at $2,620, where the 200-day EMA lies. This level has not been breached since July of this year, when Ethereum price fell below this level, initiating the current downtrend.
Featured image of DALL-E, chart from TradingView.com
