Ethereum (ETH) cryptocurrency rate is correcting after a sharp drop. However, the downward trend should continue in the market. In this case, the coin will drop in price to $ 2,600 by September 30.
Ethereum price began to dump on September 16, and in a week it decreased by 28%: from $ 3,677 to $ 2,650 (Bitstamp data). After reaching the bottom, the asset rate increased by 18% and reached the resistance barrier around $ 3145, which coincides with the 38.2% Fib, taking into account the pump, from $ 1,707 to $ 4,036.
ETH price fell below the exponential moving average indicator EMA Ribbon. Consequently, a correction was inevitable. In theory, the bulls have a chance to seize the initiative, but for this they need to break through the $ 3,145 barrier. If this happens, then the value of the cryptocurrency will rise to $ 3480. However, with a high degree of probability, the coin rate will bounce off the obstacle and go down to $ 2,600. This mark is the 61.8% Fib, which plays the role of a powerful support zone.
ETH rate has dropped by 32-45% every September since 2018. This year, ETH/USD has already lost 34% in price, and three waves of a downtrend are clearly visible on the chart. These factors suggest that the bearish trend has fizzled out, and the asset’s rate will rise. Moreover, the emerging W pattern speaks in favor of the upward movement. But the pattern will be worked out only after, within the framework of the bullish trend, the coin rate exceeds the previous peak around $ 4,032.
Analyst Lark Davis predicts a rise in Ethereum value to $ 10,000 and substantiates his prediction:
Last week, a record was set for the volume of ETH withdrawn from centralized trading floors. According to IntoTheBlock, on September 16, traders transferred $ 1.2 billion worth of coins. The previous time (in April 2021), when the value of the withdrawn coins exceeded $ 1 billion, the asset rate increased by 60% in 30 days.
Over 300,000 ETH worth $ 1.1 billion were destroyed on the blockchain in the six weeks after the implementation of EIP-1559 upgrade. Lark estimates that 1 million coins will be burned by the end of this year. Davis believes that the decrease in the number of coins in circulation, combined with the fall in the level of cryptocurrency reserves on the exchanges, will provoke a sharp jump in the price of ETH to $ 10,000.
However, we found two vulnerabilities in his hypothesis. Firstly, in April, Ethereum rate did not fall below the first bottom, and in September the asset price updated its minimum indicator. Therefore, it makes no sense to draw an analogy between trends.
Secondly, the destruction of coins and the withdrawal of assets from exchanges does not have a significant impact on the market, because no one wants to buy Ethereum. This is evidenced by the huge difference between the volume of purchased and sold coins in September.
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