Ethereum Crosses $4,900 ATH: Analyst Targets $5,500 Despite Historical September Headwinds
Ether reaches new all-time highs above $4,950 as institutional money rotates from BTC, but historical patterns warn of potential September
Quick overview
- Ethereum (ETH) has surged 8% over the past week, reaching a price of $4,700 and attracting significant attention after hitting new all-time highs.
- Bitcoin whales are increasingly converting their holdings to Ethereum, indicating a shift in institutional sentiment towards ETH.
- Despite the current bullish trend, historical data suggests caution as Ethereum has often experienced declines in September following strong August performances.
- The near-term outlook for ETH remains positive, with potential targets of $5,200-$5,500, but medium-term volatility and profit-taking risks are present.
Ethereum ETH/USD is currently trading at $4,700, which is an astounding 8% rise over the previous week and makes it the best-performing cryptocurrency on the market. The second biggest cryptocurrency in the world has gotten a lot of attention after reaching new all-time highs above $4,860. This was due to a mix of whale accumulation, institutional inflows, and dovish comments from the Federal Reserve.
Bitcoin Whales Drive Massive Capital Rotation to Ethereum
Bitcoin whales are increasingly trading their BTC/USD for Ethereum, which has caused a big change in how the market works. Arkham, a blockchain intelligence company, says that many transactions using Bitcoin that has been sitting around for a long time are being changed to ETH. This shows that institutional opinion is changing.
BitBull, a well-known trader, said that whales are “aggressive” when it comes to Ether, adding that “whales aren’t slowing down” even though ETH has gone up more than 300% in four months. This ongoing institutional demand signals that the rally may have more strength behind it, even if people thought that profit-taking would happen at these high levels.
Bitcoin’s dominance has dropped 5.88% in the last 30 days to 58.19%, which is more proof of the rotation. This shows that money is moving into the larger cryptocurrency ecosystem, not just Bitcoin.
ETH/USD Technical Analysis Points to $5,500 Target
From a technical point of view, Ethereum’s price movement is sending optimistic signals across a number of periods. Trader BitBull stressed how important it would be for ETH to close above $4,600 this week, saying that would be “the highest weekly close ever” and “set the stage for the next leg up towards $5,200-$5,500 by next week.” The cryptocurrency has successfully filled a gap in CME Group’s Ether futures market, which is a technical development that often happens before the price keeps going up. Also, ETH has stayed firm above important psychological levels, even if the market as a whole has been volatile for Bitcoin.
Jerome Powell’s dovish statements at the Jackson Hole symposium were the main reason for the recent rise in crypto prices. His hints about interest rate decreases in September made all risky assets go up. This change in monetary policy has made the overall economy a good place to invest in cryptocurrencies.
Ethereum ETF Inflows Signal Institutional Adoption Acceleration
August has been a big month for Ethereum’s institutional acceptance. Spot Ether ETFs brought in over $2.79 billion in net inflows, whereas Bitcoin ETFs saw $1.2 billion in outflows over the same time period. Nate Geraci, president of NovaDius Wealth Management, called this big change in fund flows a “notable shift” between the two asset classes.
corporations have also quickly adopted corporate treasury, with corporations holding more than $13 billion worth of Ether as of August 11. BitMine’s recent acquisition of $45 million worth of ETH, which brought their total holdings to $7 billion, shows how much companies want to get involved with Ethereum.
Historical September Patterns Raise Caution Flags
Despite the current positive trend, historical data makes a strong case for being careful as we move into September. In all three cases since 2016 where this trend happened, Ethereum had negative returns in September after having positive returns in August.
The past examples are very clear: In 2017, there was a 92.86% rise in August followed by a 21.65% drop in September. In 2020, there was a 25.32% rise in August followed by a 17.08% drop. In August 2021, there was a 35.62% rise, followed by a 12.55% drop in September. Since 2016, Ether has lost an average of 6.42% in September.
Trader CryptoGoos brought up this seasonal worry and asked if “this time will be different” as “ETH seasonality in September during post-halving years is usually negative.”
Ethereum Price Prediction: Bullish Near-Term, Cautious Medium-Term
- Near-term outlook (1-2 weeks): As long as ETH stays over $4,600 at the end of the week, technical analysis says that the price will keep going up toward the $5,200-$5,500 zone. This positive scenario is based on strong institutional demand and good macroeconomic conditions.
- Medium-term outlook (September): Historical patterns show that volatility is likely to rise and there is a chance of a 10-15% decline. However, the enormous demand for ETFs and the adoption of them by businesses may lessen the usual seasonal weakness.
Risk factors: If support levels aren’t kept up, people may start taking profits. Also, if the Federal Reserve changes its stance to a more hawkish one, risk assets like cryptocurrencies are likely to feel the impact.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save