Will Ethereum Break $5k This October?

Ethereum is edging closer to registering its first red month after two months of consecutive increases. The 1-day chart reveals that it is grappling with significant selling pressure on Tuesday.

It dropped to the previous day’s low but currently trades slightly higher at the time of writing. Nonetheless, the asset is clawing back some of the losses it incurred last week. The re-ignition of the uptrend on Sunday spurred further gains and a green close to the previous session.

Ethereum opened September at $4,391 but is edging closer to ending it with slight losses as it trades at $4,173. Its bearish close is unsurprising as a previous outlook pointed out that the coin would experience significant declines in the ninth month. 

It cited a previous record of how the altcoin traded during this period and the losses it accumulated. The write-up also highlighted reading from several indicators to back its claims. While the altcoin did not drop to the level it predicted, it retraced to $3,800 last week but rebounded.

However, onchain data suggests that the asset experienced a drop in trading action over the last 30 days. It registered lower capital inflow m compared to the previous month. One such evidence is the decline in the number of institutions adding more coins to their portfolio. There were very few over the last thirty days, with some large investors posting significant losses after the recent decline. 

Nonetheless, while spit volume remained weak, the previous driving force for the uptrends, exchange-traded funds registered lower volume in September. For example, in August, the total net assets were $28.5 billion. The figure dropped by a billion in the ninth month. Aside from the volume, selling pressure increased during this period, with ETFs posting only $158 million in netflow. 

Ethereum Gears for the Most Profitable Month

Historically, October has been the most bullish month of the fourth quarter. Ethereum gained over 7% on average and registered its largest surge in 2021, when it increased by over 42%. However, it is not always all rosy for the coin as it posted its biggest loss of 16% in 2016. 

Aside from the historic evidence, investors are becoming increasingly positive about what Q4 and the tenth month holds. 

Regarding how prices may unfold in October, the 1-week chart suggests a high likelihood of further declines. It is worth noting that the altcoin broke above the bollinger bands a few weeks ago. It has since been on the decline, and saw its biggest loss last week when it retraced from $4,447 to $3,385. The session ended with losses of almost 7%. 

Previous price movement suggests an impending drop to the middle band at $3,500. This may be ETH’s next price target if the downtrend continues. Additionally, the moving average convergence divergence prints sell signals, with the 12 EMA edging closer to intercepting the 26 EMA. 

A closer look at the charts suggests notable demand concentration around $4k. Although Ethereum broke the mark last week, the bulls may continue to defend this key level. The Fibonacci retracement level point to a slip to the 38% mark at $3,600 if the highlighted barrier fails. 

US Government Shutdown on the Horizon

The US government is edging closer to a shutdown if it fails to reach a consensus by the end of September. Investors anticipate significant selling pressure in reaction to a shutdown. Nonetheless, a previous analysis extensively discusses how it may affect the crypto market. 

However, the 1-day chart remains positive amid growing uncertainty. Several indicators are currently positive, printing buy signals. One such is the bollinger bands. The chart reveals that ETH had a slip below the lower bands a few days ago but has recovered.

The altcoin was edging closer to the middle bands but experienced notable selling pressure. Nonetheless, the buyback may resume. Sending the coin closer for the upper hand at $4,800. It may face notable pressure at the middle band before such increases.

Away from the bands, the 12 and 26 EMA are edging closer to completing a crossover. MACD may signal further price increases if this happens. 

Both indicators hint at further increases in the coming days. Nonetheless, the Fibonacci retracement levels reveal that the altcoin is struggling to stay above the 23% mark. It broke the mark on Monday but slipped below it a few hours ago. 

Previous price movements suggest that the altcoin may linger above this mark for an extended period before a breakout. It has been a key accumulation point, with rangebound movement proceeding between $4,200 and $4,400. 

 

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