Ethereum (ETH) has been exhibiting similarities to historical market trends as 2024 draws to a close, prompting traders to monitor closely for any signs of a potential downturn.
Back in 2016, ETH witnessed considerable decreases in April, August, and December.
In the current year, the digital currency has already encountered drops in April and August, leading experts to anticipate a comparable decline could materialize before the year concludes, possibly during December.
While past trends hint at a possible downturn, the critical threshold to observe is $2,800. If Ethereum manages to breach and maintain levels above this point, it might prevent a more substantial decline.
However, a failure to advance towards the $2,800 mark could result in ETH testing the $2,300 threshold and potentially even dropping to $2,000 by year-end.
Stalling of the ETH/BTC pair above the 50-day SMA
Another significant element is the inability of the ETH/BTC pair to surpass the 50-day simple moving average (SMA).
In past cycles, a robust bullish trend usually followed once ETH/BTC exceeded this SMA. As this breakthrough has not occurred yet, there might be more room for downside potential.
Historical patterns indicate that traders often rush into bullish positions prematurely without waiting for confirmation.
Presently, the competition from alternative platforms like Solana and internal challenges within the Ethereum ecosystem are exerting downward pressure on Ethereum.
Based on the current price movements, Ethereum might face further declines ahead.
Traders seeking to benefit from this scenario might contemplate short positions, as the likelihood of more drops appears to be high.
Simultaneously, the Ethereum Foundation has been actively selling assets, with recent divestments of 100 ETH contributing to the prevailing bearish sentiment.
Whale Investors Remain Optimistic
Despite these parallels, Ethereum has undergone significant transformations since 2016, including the implementation of the Merge and the 4844 upgrade, fundamentally altering its structure.
Despite the ongoing downward trend, the behavior of whale investors has displayed minimal change.
Data from Binance illustrates that 73.14% of accounts are still holding long positions on Ethereum, showcasing confidence in its long-term prospects.
While the short-term forecast may carry a negative outlook, the presence of these substantial holders indicates an underlying belief in a potential recovery.
Once the price stabilizes and both ETH/USDT and ETH/BTC establish their support levels, traders could identify robust buying opportunities for the long run.
Despite the likelihood of another decline for Ethereum before the close of 2024, the long-term perspective remains positive.
Traders should exercise caution in the near future, but the potential for a turnaround presents lucrative prospects for those interested in long positions once a confirmed bottom is established.
ETH’s price trajectory remains among the most closely monitored within the cryptocurrency arena as the year draws to a close.