Ethereum prices could face significant declines this month, with predictions suggesting a potential drop of up to 20% from current levels. As Ethereum surged past previous all-time highs in August, analysts are closely watching for signs of a corrective phase.
According to Benjamin Cowen, the founder of ICT Crypto, Ethereum (ETH) is likely to retrace back to its 21-week exponential moving average (EMA), estimating a target around $3,500 before embarking on another upward trajectory towards a new all-time high by the end of the year. This prediction follows a historical pattern observed in previous market cycles.
“A lot of people will get upset with this idea, but this has been the plan since ETH ‘went home’ in April,” Cowen remarked, referencing the significant drop below $1,500 that occurred in April.
Slumptember Has Arrived
The phenomenon of significant price corrections throughout September has been well-documented over the past two bull market years. Data from CoinGlass highlights that six out of the past ten Septembers have witnessed declines in Ethereum prices, with average losses estimated around 6%. Interestingly, in bull markets, the corrections can be even larger; for example, in September 2017, Ethereum fell by 21.6%, and in September 2021, the asset saw a decrease of 12.5% not long before rebounding to set new all-time highs.
This month’s market movements may indeed present a buy-the-dip opportunity for savvy investors. The longer-term outlook for Ethereum remains incredibly bullish, especially with Wall Street increasingly adopting the asset class.
Recent reports from Arkham Intelligence indicate that large investors, commonly known as “whales,” are actively accumulating Ethereum. Notably, a whale holding $5 billion in Bitcoin purchased $1 billion in ETH and subsequently staked the entire amount, which signals a strong belief in Ethereum’s future potential.
“Based on its position as the most trusted and reliable world ledger for stablecoins, RWAs, DeFi native assets, and TradFi’s default choice for tokenization…easy to imagine ETH commanding a market cap of $35 trillion or more by 2032/2034,” remarked DeFi educator, DeFi Dad, underscoring ETH’s substantial growth potential.
ETH Price Retreats
Currently, despite the bullish long-term outlook, many retail investors are selling their Ether holdings amid market fluctuations. As of late Monday trading, ETH fell from an intraday high of $4,480 to a low of $4,250, reflecting the prevailing downtrend. While it managed to briefly recover to $4,350 in early Tuesday trading, it has consistently printed lower highs and lower lows throughout the week.
As the market appears poised for continued declines throughout September, analysts remain optimistic about a recovery in the fourth quarter. Investors are advised to stay vigilant and consider market dynamics carefully as they navigate this corrective phase.
