On Tuesday, the Ethereum price fell by 8%, following the overall correction in the cryptocurrency market and even outperforming Bitcoinโs (BTC) dip. This has sparked concerns as ETH nears important support levels, putting its $3,000 mark at danger.
October Events Lead To Significant Corrections
Ram Ahluwalia, the chief investment officer at Lumida Wealth, recently noted that the roots of this latest crypto sell-off can be traced back to the Federal Reserveโs (Fed) October meeting.ย
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On October 29, the central bank announced its second interest-rate cut of the year. However, during the subsequent press conference, Fed Chair Jerome Powell expressed uncertainty about the possibility of another reduction in December.ย
According to Ahluwaliaโs analysis, this has been detrimental to Bitcoin and the overall crypto market, as lower interest rates typically bolster speculative assets like cryptocurrencies.
Adding to the ongoing Ethereum price correction, mid-October saw US President Donald Trump announce new tariffs on China due to its restrictions on rare earth exports. This announcement triggered a flight of investors from cryptocurrencies to safer assets such as gold.ย
Ethereum Price Under Pressure
From a technical perspective, analysts at The Birb Nest have highlighted key levels to watch. On social media platform X (formerly Twitter), they noted that the Ethereum price broke below a critical weekly support level, which they interpret as a major deviation until price action proves otherwise.ย
They highlighted that a breakdown below the altcoinโs yearly open of $3,337 might push the Ethereum price to $2,800. For a positive reversal, they believe ETH must retake $4,000 and close above this level on a weekly basis.
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Additionally, the ETH/BTC pairing is under scrutiny, with prices trading below the yearly open at 0.0355. To target a rise towards 0.04, reclaiming this level is essential. Until then, analysts are watching for potential retests around 0.0325โ0.03.
However, some experts, such as Ali Martinez, caution against overly optimistic projections. He warns of a worst-case scenario in which the Ethereum price fails to reclaim the $4,000 mark, and potentially drops to as low as $2,400 or even $1,700.
A decline of this magnitude would mean an additional 45% increase for ETH, which could also lead to a deeper correction in the broader altcoin market.ย
As of this writing, ETH is trading at $3,100. This represents a significant gap of 32% between the current trading prices and the all-time highs, which could not be re-tested before the end of the year unless a new recovery occurs before the weekly close.ย
Featured image from DALL-E, chart from TradingView.com
