Ethereum’s native token, Ethereum (ETH), is on track to post its first October loss since 2018, having fallen 5.40% as of October 27, reaching $2,475.
ETH/USD daily price chart. Source: TradingView
This decline is due to increased competition from newer smart contract platforms such as Solana (SOL) and lukewarm market reaction to Ethereum-based spot ETFs.
However, there are growing signs that Ethereum may be ready for a rebound, with several indicators pointing to a potential recovery towards $6,000.
Ethereum holds support prior to the 160% rise.
Ethereum is currently holding a critical support level around $2,400. This price is consistent with the lower trendline of ETH’s multi-month upward channel pattern, ahead of historically sharp price recoveries, including the cryptocurrency’s rally of over 160% between October 2023 and March 2024.
ETH/USD weekly price chart. Source: TradingView
If the $2,400 support remains intact, Ethereum could target the channel’s upper limit near $6,000 in the coming months.
Adding to the bullish outlook, Ether’s weekly Relative Strength Index (RSI) also rebounded from historical support, which is consistent with ETH’s test of the channel’s lower trendline.
ETH price action has rebounded from similar support levels in the past, showing a sharp upward trend.
$1.3 billion of ETH leaves Coinbase
The recent surge in Ethereum outflows from Coinbase suggests a potential wave of institutional interest, according to data shared by CryptoQuant analyst Burak Kesmeci.
On October 25, in just one hour, an anonymous entity withdrew 543,000 ETH worth more than $1.3 billion from cryptocurrency exchanges, making it one of the biggest Ether movements in the past three months.
Ethereum exchange leak. Source: Burak Kesmeci
These large-scale transfers are often seen as a sign of institutional activity. When a major player moves a significant amount of cryptocurrency off an exchange, this usually signals a shift toward a long-term holding strategy and can herald bullish sentiment.
Kesmeci pointed out that a large outflow of Ether could be a harbinger of a price rise, citing another transaction in August 2024 in which 681,100 ETH worth $1.8 billion exited the Coinbase exchange.
“This is the second leak in three months and strongly suggests that institutional interest is likely to increase.”
Ethereum is being watched for a major reversal compared to its major competitors.
Ethereum’s potential $6,000 rally could receive an additional boost from cycles in major competitors such as Bitcoin (BTC) and Solana.
From a technical perspective, Ethereum is currently trading around an all-time high rising trendline support for Bitcoin, which, combined with an oversold RSI, could enable a sharp price rebound in the coming months.
ETH/USD weekly price chart. Source: TradingView
Analyst Crypto Avails further emphasizes that ETH/BTC’s bounce against its previous trendline support coincided with the start of “altcoin season”, the phase in which alternative cryptocurrencies outperform Bitcoin.
ETH/USD weekly price chart. Source: Crypto Avails
User
“Altcoins are very cheap right now and these levels will soon be forgotten.”
Ethereum vs. Solana implies capital rotation.
Ethereum’s next biggest rival, Solana, has surged around 900% on the SOL/ETH trading pair since June 2023. As of October 27, SOL/ETH reached a record high of 0.0710 ETH.
SOL/ETH weekly price chart. Source: TradingView
Nonetheless, the weekly RSI for this pair is above 70, indicating that it is overvalued. In other words, Solana may rise too quickly compared to Ethereum and face downward pressure.
relevant: Really flipping? Solana price has reached an all-time high compared to Ethereum.
A bearish differential in SOL/ETH along with declining RSI and volume indicates weakening buying pressure and a possible price correction. Historically overbought conditions could push SOL/ETH down to the 50-week EMA, suggesting a potential 35% decline.
This convergence of capital circulation creates a favorable environment for Ethereum to push toward its goal of $6,000 by the end of the year by early 2025.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.