4 Bear and 3 Bull Scenarios for Ethereum (ETH) Price in September

As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen my fair share of bull and bear runs, market booms, and busts. In the current landscape, Ethereum presents an interesting case study.

That is if Ethereum can weather three big price hurdles ahead of it in September,

Introducing affordable “blobs” as part of the Dencun update for secondary blockchain layers has sparked a flood of activity on Ethereum’s decentralized smart contract network, enabling it to quickly expand its capacity to connect with other nodes.

After that period, transaction costs (gas fees) within the Ethereum network’s main layer have dropped substantially. This decrease in fees has impacted the income of validators, but it has also led to an increase in activity on lower-cost Layer 2 solutions.

As a researcher observing the blockchain landscape, I’ve noticed an intriguing trend post-March, when Dencun was implemented on Ethereum L2. The number of monthly active users has more than doubled, indicating a significant increase in user engagement.

Despite Ethereum’s advancements and promising future outlook this year, it hasn’t effectively translated these factors into a unified market momentum. This week, for instance, Ethereum dropped to $2,400, returning its price level to where it was in February. In contrast, Bitcoin has shown slightly better performance throughout 2021.

Will Ether’s price continue its volatile trend, or does it hold a favorable position compared to competitors such as Binance Coin (BNB), Solana, Ripple (XRP), TRON, and Cardano in the short to mid-term future?

4 Ethereum Price Advantages In 2024

Here are four advantages Ethereum has going forward:

1. Another Wrapped Bitcoin On Ethereum

Natively put your idle BTC to work on Ethereum.
As a crypto investor, here’s how I would explain the benefits of using 21BTC on Ethereum:
Here’s what you need to know(/5)
— 21.co (@21co__) September 3, 2024

21Co, the proprietor behind the Bitcoin ETF issuer 21Shares, has just launched a new Wrapped Bitcoin asset on the Ethereum network.

This is a reminder: Your Bitcoin is a final settlement in a brutally scarce currency on the most secure Web3 layer blockchain —and Ethereum represents so many things you can do with it without just handing it over to the establishment it’s disrupting.

Since Bitcoin’s network effects and the potential expansion of each Satoshi’s value in a globally expansive market have caused it to remain in a long-term holding phase, it’s likely that when the demand bursts and the floodgates open, Ethereum will be one destination where those holdings are spent.

In various sectors such as finance, insurance, contracts, customer relationship management (CRM), supply chain, gaming, and online databases, major smart contract platforms like Ethereum are poised for an exceptionally bright future.

2. Institutional Adoption Marches On

Institutional investors have been cautious in their handling of Ethereum-based ETFs so far, leading to a slowdown in the price of Ether due to outflows. However, despite this hesitance, Ethereum remains second only to Bitcoin in terms of overall institutional interest. Meanwhile, some corporate managers and hedge funds are showing an increasing interest in Ethereum’s rivals such as Solana and Cardano.

As a researcher immersed in the blockchain landscape, I’ve observed that Ethereum and its Layer-2 scaling solution, Polygon (MATIC), are currently driving the majority of institutional products within the Web3 sphere. A recent post by Adriano Feria, a well-known Ethereum advocate on social media, detailed the progression of corporate projects leveraging Ethereum’s capabilities.

It’s unfortunate to have to say this to Ethereum skeptics, but it appears that ETH is making strong progress towards gaining substantial institutional support, spearheaded by heavyweights such as Coinbase, Circle, BlackRock, and most recently, Sony, according to Feria.

Following Sony’s declaration on August 22 about the launch of their own Ethereum Layer-2 blockchain, Soneium, there might be additional opportunities for profit in Ethereum (ETH) in the future.

3. Ethereum Price Chart Technicals

In simpler terms, the cryptocurrency ETH experienced its largest drop in two years during August, decreasing by 22%. According to the mean reversion theory, this means that its price could eventually return to its average trend, providing a basis for a potential increase. Translated to a retail context, you might say that Ether was significantly discounted in August.

As a crypto investor, I find myself intrigued by the potential undervaluation of ETH. This perspective is supported by expert forecasts from influential players within the Web3 realm, as outlined in a comprehensive study by CoinGecko. These key players span across active funds, reputable publications, and prestigious banking institutions.

What is Ethereum’s price prediction for 2024?
As a diligent analyst, I’m excited to share my insights from our recent research. It appears that many esteemed analysts, influential outlets, and savvy fund managers anticipate an average Ethereum price of around $6,404 by the year-end in 2024.
Read the full study:
— CoinGecko (@coingecko) August 16, 2024

4. Dovish Fed Regime Pivot

Producing new coins leads to an intentional increase in the money supply, yet it doesn’t automatically lead to inflation.
If both the quantity of money and the number of people utilizing it grow proportionally, inflation or price stability tends to result.
— Satoshi Nakamoto Quotes (@QuotesNakamoto) July 5, 2024

Announcing a shift towards reduced interest rates by the Federal Reserve chairman in August could stimulate the crypto market. An increase in the supply of dollars leads to an influx of additional liquidity that can boost both traditional markets, such as stocks, and digital assets like cryptocurrencies.

Additionally, there’s a shared belief among cryptocurrency investors that they can protect their wealth from rising dollar inflation by investing in digital currencies, particularly those that have strict limitations on the creation of new units.

Ethereum stands out as an excellent candidate among alternative digital currencies for sound money. Following the Merge event in September 2022, Ethereum transformed from a mined to a staked cryptocurrency. Additionally, it incorporated a burn feature that eliminates a minimal amount of Ether during transactions.

By controlling the supply, ETH tokens maintain their relative value compared to other currencies such as Bitcoin and the U.S. dollar, ensuring a stable purchasing power for each token.

3 Price Hurdles for Ethereum in September:

1. September Doldrums a Headwind

Historically speaking, September tends to be a tough month for financial markets, particularly stocks. On average, it’s the only calendar month that shows a negative return on investment (ROI) over the past 98 years. For crypto assets, this month is often characterized by increased volatility and lower prices, making it generally choppy and slow-moving.

This implies that it’s an excellent opportunity for new crypto investors to acquire assets at competitive prices. Moreover, this season isn’t typically favorable for selling, aiming to optimize profits or limit losses.

2. US Election Uncertainty

The markets are equally concerned about the results of the upcoming U.S. election in November. If Harris wins, it may result in increased costs, potentially higher taxes, and stricter, costlier regulations.

If Donald Trump wins, there’s a strong possibility we might witness another costly trade conflict involving nearly half the globe, similar to the one that hit Wall Street hard in the past.

3. Bitcoin’s Price Gravity Well

The value of Ethereum is generally tied to the current price of Bitcoin. Historically, following the halving events in Bitcoin’s four-year cycle, a brief period of market decline often ensues. This downtrend is typically followed by a prolonged surge towards new record highs. Such fluctuations in the Bitcoin market are likely to influence prices of other cryptocurrencies as well.

2024-09-07 18:34