Was Friday’s Dip The Last One Before Ethereum Attain a New ATH?

Ethereum had a massive decline on Oct 10, which saw the calls for uptober slowly drown out. It had arguably its largest dip, retracing to levels not seen in more than two months.

The altcoin kicked off the previous intraday session at $4,371 but plummeted after a slight uptick. An outlook noted that it remained range-bound for an extended period before the breakout that led in a massive decline.

ETH retraced, breaking below $4,000 and slipping as low as $3,51o on Binance and even as low as $3,423 on Kraken. Nonetheless, it has since rebounded and is relatively stable. However, the asset prints a doji on the 1-day scale, indicating no significant improvement in price on Saturday.

The cause of the latest declines was not as far-fetched as fundamentals were the trigger. They functioned like a two-stage rocket. The first was Donald Trump’s threat of tariffs on China, and the other was when he announced the actual tariffs.

The crypto market registered its most significant liquidation ever, exceeding $19 billion, and long positions made up more than 95%.

Away from trading action on Friday, the asset saw a notable pullback over the weekend. However, trading actions at the time of writing suggest that the uptrend was short-lived. On the 1-week scale, the asset is down by almost 7% amid attempts at recovery.

One of its biggest declines happened on Tuesday when it retraced from $4,244 to $3,892. Another significant retracement occurred during the previous intraday session, resulting in a drop to $3,673.

Ethereum continued its recovery on Saturday after its rebound on Friday—questions about whether this is the last dip before a massive surge rages. 

Is the Ethereum Downtrend Over?

It is worth noting that the latest decline is unsurprising as several outlooks warned about it. One such was published on August 31 and laid out several factors that would cause a massive plummet while going over the odds of a slip to $3,500.

The analysis noted several bearish signals on the 1-week chart. For example, the bollinger bands reveal that the asset tested the upper line before retracing. Notably, it has traded near this band for the past eight weeks, suggesting that a correction was imminent based on the indicator’s behavior.

In addition, the relative strength index slipped from 74 last week to 67 as selling pressure intensified, signaling a more neutral momentum. The metric is expected to continue its decline, with 50 emerging as the next likely target. It concluded by predicting a $10% drop in the next month.

Trading actions in September called the prediction a bluff as the asset rebounded at $3,835 and closed with losses exceeding 5%. Nonetheless, the article added that there is an increased chance of a slip $2,900.

Last week, Ethereum dropped to $3,500 but rebounded, fulfilling one part of the outlook. However, taking into consideration the bollinger bands reveals a higher chance of further slip.

On the 1-week scale, the altcoin dropped below the SMA but rebounded and is now trading above the metric. Previous similar declines continued wth short breaks until the coin retested the lower band. This means that a dip to the predicted $2,900 remains likely.

The previous statement explains the reason for the dip in the last four days. The asset dropped below bollinger’s middle band again, but maintains trading above it at the time of writing. However, unfolding events reveal a glimmer of hope. 

The Unfolding Events

While there is a significant possibility of further retracement, unfolding events suggest a slim chance of the uptrend resuming. One is that investors have resumed accumulation. 

Reports from Lookonchain show several whales stacking up more Ethereum following the previous retracement. For example, Bitmine bought 72,898 ETH worth $281 million. The firm has continued to accumulate more of the asset before its latest reported purchase. On Oct 16, it added 104,336 ETH worth over $417 million.

Prior to the latest purchase from Bitmine, other whales staged a buyback. This was captured on CryptoQuant, revealing that exchange reserves significantly reduced during this period.

Aside from the buybacks from the bulls, the 1-week chart depicts an alternate direction prices may follow. A closer look at the bollinger bands shows that the largest altcoin, on several occasions, used the middle band as support.

A case study examines the events in 2021 and 2024 when Ethereum retraced after breaking above the upper band. It rebounded off the SMA and resumed its uptrend afterward. If the trend repeats, the recent decline may mark its last dip, and recovery may start next week.

It is worth noting that the candlestick supports this prediction. A closer look at the chart indicates that last week’s candlestick was longer, with wicks extending lower. However, the one representing the current session shows a higher wick as ETH registered a higher low. 

With candlesticks and indicators pointing to a possible change in price trajectory, it remains to be seen if fundamentals will align.

Ethereum May Become Rangebound

While previous price movements suggest a significant chance of recovery, the surge may not be instant. On the 1-week chart, several weeks of low trading volume and reduced volatility followed a massive retracement.

On average, the range-bound movements lasted three weeks before a breakout. Ethereum is down by almost 7% on the 1-month scale. A repeat of the highlighted trend will see the coin end October with significant losses, marking its second consecutive.

However, the trend may not just affect ETH; other cryptocurrencies in its ecosystem may experience the same movement. For example, Ethereum Classic is trading at $15.6 at the time of writing and is seeing reduced trading volume as the apex altcoin.

On the 1-month scale, it is down by over 15%. A range-bound movement over the next two weeks may see it end the month close to its current value.

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