- Ethereum set to outshine Bitcoin as its price follows predictions of a repeated altcoin season surge, says Steno Research analyst.
- The report indicates that the Fed’s rate cuts will enhance blockchain activity, fueling Ethereum’s rise.
- Ethereum bulls may maintain buying pressure to sustain the rally if ETH holds a key support level.
Ethereum (ETH) is surging, up by 3% on Friday, driven by recent insights from Steno Research. According to the report, the Federal Reserve’s (Fed) recent rate cut will trigger an ETH rally similar to its previous altcoin season performance. In this scenario, Ethereum charges above Bitcoin in daily performance, which echoes a familiar historical pattern.
Ethereum primed for a stellar comeback: Market movers daily digest
Following the Fed’s 50 basis points rate cut, Steno Research suggests Ethereum may replicate its stellar performance from 2021, where it more than doubled its value compared to Bitcoin. This forecast indicates that Ethereum charges above Bitcoin in daily performance, reassuring ETH holders with a fresh wave of optimism.
Although Ethereum has lagged somewhat in the current bull market, rising about 8% against Bitcoin’s 43% since year’s start, this could change rapidly. For instance, the ETH/BTC pair, reflecting Ethereum’s price in Bitcoin terms, hit its lowest since April 2021 earlier this week.
Analyst Mads Eberhardt is optimistic, attributing potential Ethereum gains to increased on-chain activity spurred by the Fed’s rate cuts. The rise of DeFi, stablecoins, and NFTs during the previous altcoin season saw Ethereum outperform Bitcoin. Eberhardt believes similar dynamics are at play now, positioning Ethereum well for another surge.
Early signs align with this prediction, as ETH has risen over 3% while Bitcoin (BTC) has dipped by 0.7%. However, investors should stay alert, as increasing Ethereum reserves on exchanges could introduce selling pressure, potentially leading to a temporary downturn.
ETH Exchange Reserve
Moreover, Ethereum ETFs recorded net inflows of $5.2 million on Thursday. Among all issuances, BlackRock’s ETHA was the standout, recording the majority of these inflows.
Ethereum poised to bounce off 100-day SMA to maintain its rally
Ethereum is trading around $2,540 on Friday with a 3.3% increase on the day. Over the last 24 hours, ETH’s liquidations amounted to $25.3 million, divided between $9.67 million in long and $15.63 million in short positions.
In its short-term charts, ETH is attempting to correct after nearing the $2,595 resistance level. If ETH can find support around the 100-day Simple Moving Average (SMA), it could reattempt to reclaim this resistance level.
ETH/USDT 4-hour chart
A successful surge above this resistance may target the $2,817 mark, a significant resistance point since the market crash on August 5. This level also acted as a crucial support from ETH’s decline from its peak in March.
Should ETH drop below the 100-day SMA, it could find support near the $2,395 level. Defending this level could signal a rising bullish sentiment.
Current momentum indicators, like the 4-hour Relative Strength Index (RSI) and Stochastic, suggest a potential move down from their overbought regions at 70 and 80, respectively.
Short-term projections indicate ETH could rally to $2,572, potentially liquidating positions worth $39.68 million.
A daily close below $2,395 would invalidate this bullish outlook.
Ethereum FAQs
Ethereum is an open-source blockchain platform with smart contract functionality. It underpins the Ether (ETH) cryptocurrency, making it the second-largest crypto and the leading altcoin by market capitalization. The Ethereum network is designed for scalability, programmability, security, and decentralization, which make it a favorite among developers.
Ethereum utilizes a decentralized blockchain technology, enabling developers to create and deploy applications independent of central authority. The network’s programming language facilitates the creation of self-executing smart contracts—code that ensures verifiable and secure inter-user transactions.
Staking is a strategy where investors lock their assets for a specified time instead of selling them, a common approach in blockchains using the Proof-of-Stake (PoS) mechanism. Staking allows users to earn rewards for committing their tokens, offering a way to generate passive income from long-term crypto holdings.
Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event known as “The Merge.” This move aimed to enhance network security, reduce energy consumption by 99.95%, and enable new scaling solutions, potentially increasing transaction capacity to 100,000 per second. PoS also lowers the entry barriers for participants, given its lower energy requirements.
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