Ethereum Flashes the Mother of all Buy Signals

Ethereum Flashes the Mother of all Buy Signals

Ethereum's (ETH) price may be close to bottoming out as several seasonal, cyclical, and technical factors perfectly align. However, only time will tell if we have yet to see the bottom for the Ethereum price as macro headwinds may continue to threaten the crypto ecosystem.

Bitcoin Halving Cycle

Much like the Bitcoin price, the ETH price also follows the 4-year halving cycle. However, ETH, like Bitcoin, usually finds its lowest value a year before the halving event.

In this regard, 2023 will be essential for the faith of the ETH's long-term logarithmic uptrend.

Ethereum Relative Strength Signal

Ethereum is among the few cryptocurrencies that are outperforming the overall market weakness. Compared to Bitcoin's price action, ETH is showing relative strength. The divergence between the ETH and Bitcoin prices is undoubtedly a bullish signal.

The relative strength alert is showing up because the ETH price made a higher low while, at the same time, the Bitcoin price has printed a lower low below the mid-June low. This points to the fact that ETH is stronger than Bitcoin.

Long-Term Logarithmic Channel

In the long term, ETH's price continues to follow its logarithmic channel. ETH's price always bounced in between, and right now, we're at the middle band of the channel, which was already rejected back in June.

If the middle band of the channel is respected, there is not much more downside to the ETH price. In this case, the mid-June low of $880 may be the actual bottom.

A weekly close above the critical resistance level at $1,730 and an RSI break above the 50 midpoint could call for a reversal. However, more short-term consolidation is expected above the mid-June low until the macro headwinds settle down.

Possible Rejection

While we have a lot of factors pointing to the upside of Ethereum in the long term, there is one crucial factor to consider that might undermine this analysis. Bitcoin may still have more downside ahead. In our analysis on Friday, we mentioned that Bitcoin may still have more downside ahead, which can come this month or the next, reaching a bottom somewhere between $10,000-$14,000. If Bitcoin continues to fall, then Ethereum will most likely follow suit.

However, seeing how it is currently outperforming Bitcoin and how the mentioned technical factors point to a bull run, we can expect Ethereum to rebound faster and stronger than BTC after Bitcoin's downturn.