The cryptocurrency market, led by Bitcoin (BTC) and Ethereum (ETH), surged on Tuesday to levels not seen in over a month in anticipation of the Federal Reserve’s imminent announcement of its first interest rate cut since the COVID-19 pandemic. Despite the uncertainty surrounding the Fed’s decision, Bitcoin Halving years, specifically the fourth quarter (Q4), are historically bullish for the leading digital assets and the broader market.
Ethereum’s performance following previous Bitcoin Halving events has shown remarkable variability. In the year following the 2016 Halving, Ethereum experienced a 45% decline before launching into an impressive rally, culminating in a 3,400% increase. Similarly, after the 2020 Halving, Ethereum surged 150% before skyrocketing to a 2,150% gain. However, since the latest Halving in April, Ethereum has mirrored Bitcoin’s volatility, encountering significant price fluctuations and establishing lower support levels.
The recent month has been difficult for Ethereum, marked by two substantial crashes. On August 5, Ethereum retraced over 25%, plummeting to a six-month low of $2,110. The downward trend continued into September, with heightened selling pressure causing a drop from $2,800 to around $2,150 in just one week.
Despite these challenges, analyst CryptoBullet remains optimistic about Q4’s potential for a turnaround. The analyst identified a “triple bottom” formation on the ETH/USDT daily chart, reminiscent of price action observed in 2021. This pattern suggests that Ethereum could be poised for a rebound similar to that seen in 2021 when it surged from approximately $1,650 to its all-time high of $4,730. Currently trading at around $2,330, Ethereum sits over 52% below its previous all-time high.
Looking ahead to Wednesday and the upcoming Fed rate cut, there are key levels to monitor for Ethereum. In the past week, Ethereum has established the $2,260 mark as a significant support level. This price point is crucial, acting as a buffer against further decline toward $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 short term. Should Ethereum manage to break above these resistance levels, bullish investors will set their sights on the next major resistance at $2,520. Just above this lies another critical hurdle at $2,620, where the 200-day EMA is situated, a level not surpassed since July of this year when Ethereum’s price fell below it, initiating the current downtrend.
