Title: Analyst Warns of Potential Ethereum Downturn Based on Historical Data
Ethereum is predicted to potentially face a decline in December, as historical patterns suggest, according to a recent analysis. Benjamin Cowen highlights that Ethereum might repeat its cyclical downturns from 2016, particularly drawing attention to the possibility of lower levels in December. This forecast points to a potential pullback, similar to those observed in April and August.
In the past 24 hours, Ethereum partially recovered after falling to $2,450, trading at around $2,530 with a 1.5% drop at the last hour. This decline aligns with the possibility of another drop before a sustained upward movement. Notably, Ethereum recently overcame the critical $2,700 resistance, only to face immediate selling pressure and a sharp decline.
Option contracts could increase volatility as the Ethereum market is bracing for significant turbulence due to $1 billion worth of options expiring this Friday. Market makers typically aim to steer prices towards "maximum pain" levels, minimizing traders' profitability during such periods. Ethereum's price is currently close to this level, trading 1.85% away from the $2,600 maximum pain point. The levels of open call and put contracts indicate a bearish outlook. As of October 22, the call-to-put open position ratio at 0.95 suggests potential for increased volatility.
Recent developments in the Ethereum network have shown a significant drop in transaction fees, potentially boosting network usage. According to Santiment data, as of October 23, transaction fees recently decreased to an average of $1.63. Historically, low transaction fees have coincided with increased user activity, signaling market bottoms. Furthermore, Ethereum's performance against Bitcoin is noteworthy. On October 23, the ETH/BTC pair fell to its lowest level since April 2021. Market analyst Benjamin Cowen anticipates that the 0.036 BTC level could serve as a potential stop point, indicating the continuation of the pair's bearish trend could accelerate with further volatility.
The recent news of new ETH sales by the Ethereum Foundation influences the cryptocurrency’s struggle to regain its allure. However, Ethereum co-founder Vitalik Buterin has shared ambitious targets outlined in Ethereum's roadmap. One of these targets, as part of the "Surge" phase, is to achieve a transaction capacity of 1,000 transactions per second. Buterin's goals outline a significant roadmap for Ethereum's development.