Will Ethereum Price Rise Again to $3K?

A renewed wave of dip-buying invoked a rebound in Ethereum’s native token, Ether (ETH), as well as the broader crypto and stock markets. Notably, ETH’s price has climbed by almost 20% after the Aug. 5 crash that—at one point—had wiped out $212.79 billion from the crypto market.

Still, ETH’s gains are little when compared to its prevailing downtrend, raising questions about whether its recent moves are part of a bear market recovery. The cryptocurrency’s next potential target is around $3,000. But, does it have the momentum required to reach the level? Let’s discuss.

A Typical Oversold Bounce? 

Ether’s recent recovery moves by any metric is response to its oversold status.

For instance, the cryptocurrency’s upside is preceding its daily relative strength index’s (RSI) decline below 30, which is considered oversold per the rule of technical analysis. In other words, ETH’s price is trading below its notional value, and therefore, as part of an adjustment, should rise.

Traders have responded in a similar manner so far, with ETH’s price 20% bounce to reclaim $2,500. That further aligns with renewed inflows in the United States-based Spot Ethereum exchange-traded funds (ETFs), indicating even Wall Street is buying the dip.

The pressing question remains whether or not the issues that triggered the Ethereum market’s downward spiral been resolved. That includes elevated concerns about a US recession, the ongoing collapse of the yen carry trades, and the US Federal Reserve’s rate cut delay.

David Donabedian at CIBC Private Wealth US believes most risk investors have misinterpreted a slowing economic growth with a US recession, noting that the Fed will unlikely  change its current course of action “due to a stock market correction.” In other words, they’ll still be data dependent before announcing any rate cuts.

On the other hand, CME data indicates a 64.5% probability of a 50 basis point rate cut in the Fed’s Sep. 18 meeting, down from 85% a day ago but up from 5.5% a month ago.

Ether will likely hold above the $2,500 level in the days leading up to the Fed rate decision on Sep. 18, with recent ETF inflows showing investors’ conviction about extended recoveries.

Ether Whales Are Accumulating

Ether’s ability to hold above $2,500 strengthens further due to the recent accumulation patterns by its richest investors, also known as “whales,.”

According to data analytics platform Glassnode, the number of Ether entities holding at least 1,000 ETH (the blue wave) has jumped during the August price crash, reinforcing that the richest investors in the space—which may be institutions, professional investors, hedge funds, etc.—are buying the dip.

From a technical perspective, Ether’s ongoing price moves are occurring inside a historically relevant consolidation channel, defined by the $2,200-2,800 range of the December 2023-February 2024 session.

Fractally, Ether price may move inside the consolidation pattern until September, and—depending on how the Fed rate policy turns out—decide its next bias. For instance, a rate cut between 25 and 50 bps may help elevate the ETH price toward $3,000.

Conversely, holding rates steady risks crashing the price toward the range’s lower trendline at around $2,200.

“Still believe we have a bit of chop in the lower bounds of this range before we send to new highs,” noted independent market analyst Kaleo, adding:

“But if you’re asking yourself “Is this a good place to start bidding?” My answer is yes.”