Ethereum’s native token, Ether (ETH), is on track to post its first October loss since 2018, dropping 5.40% month-to-date to $2,475 on October 27th.
ETH/USD daily price chart. Source: TradingView
This decline is being driven by increased competition from new smart contract platforms like Solana (SOL) and the market's lackluster response to Ethereum-based spot ETFs.
However, there are increasing signs that Ether could turn around, with several indicators pointing to a possible rally towards $6,000.
Ether holds support ahead of 160% rally
Ether is currently holding above a key support level around $2,400. This price is trending at the lower end of ETH's multi-month upward channel pattern, which has historically preceded sharp price recoveries, such as the cryptocurrency's more than 160% rally from October 2023 to March 2024. matches the line.
Weekly price chart of ETH/USD. Source: TradingView
If the $2,400 support holds, Ethereum could target the upper end of the channel near the $6,000 mark in the coming months.
Adding to the bullish outlook, Ether’s weekly relative strength index (RSI) has also rebounded from its historical support zone, which coincides with ETH testing the lower trendline of the channel.
ETH price movement has rebounded from similar support levels in the past, resulting in a sharp rally.
$1.3 billion ETH leaked from Coinbase
The recent spike in Ethereum outflows from Coinbase suggests a potential wave of institutional interest, according to data shared by CryptoQuant analyst Burak Kesmeci.
On October 25th, in just one hour, an anonymous party withdrew 543,000 ETH (worth over $1.3 billion) from the cryptocurrency exchange, making it one of the biggest movements in Ether in the past three months.
Ethereum exchange leaked. Source: Burak Keshmechi
Such large-scale relocations are often seen as a sign of institutional activity. When a large player moves a significant amount of cryptocurrencies off an exchange, it usually signals a shift to a long-term holding strategy and can portend bullish sentiment.
Kesmeci points out that a large outflow of ether could be a harbinger of price increases, citing another transaction in August 2024 in which 681,100 ETH worth $1.8 billion was leaked from the Coinbase exchange. did.
“This is the second such outflow in the last three months, and strongly suggests that institutional investor interest may be increasing.”
Ethereum aims for important reversal against top rival
Ethereum’s potential rally to $6,000 could be further boosted by rotation between top rival Bitcoin (BTC) and Solana.
From a technical perspective, Ether is currently trading around all-time uptrend line support against Bitcoin, and combined with an oversold RSI, the price is likely to rise sharply in the coming months. There is a possibility of backlash.
Weekly price chart of ETH/USD. Source: TradingView
Analyst Crypto Avails further highlighted that ETH/BTC’s bounce off the aforementioned trendline support coincided with the start of “altcoin season,” where alternative cryptocurrencies outperform Bitcoin. are.
Weekly price chart of ETH/USD. Source: Crypto Avails
“The strengthening of ETH against BTC will lead to a rise in altcoins,” user X pointed out, adding:
“Altcoins are very cheap right now, but these levels will soon be forgotten.”
Ethereum vs. Solana further hints at capital rotation
Solana, Ethereum’s next top competitor, has soared nearly 900% on its SOL/ETH trading pair since June 2023. As of October 27th, SOL/ETH set a new record high of 0.0710 ETH.
Weekly price chart of SOL/ETH. Source: TradingView
Nevertheless, the weekly RSI for this currency pair is above 70, indicating that it is overvalued. In other words, Solana may have risen too quickly relative to the ether and could face downward pressure.
Related: A real reversal? Solana price hits new record high against Ethereum
The bearish divergence in SOL/ETH, coupled with lower RSI and volume, indicates weakening buying pressure and a possible price correction. Historically, overbought conditions have caused SOL/ETH to fall towards the 50-week EMA, suggesting a potential decline of 35%.
The convergence of these capital rotations creates a favorable environment for Ethereum to progress toward its $6,000 target by the end of early 2025.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.
