Ethereum has struggled to find stable ground at around $3,000, with weak institutional inflows and waning investor confidence keeping the altcoin subdued.
However, the month of October is expected to bring about a massive shift in sentiment and price action, provided institutions play along.
Ethereum May Not See a Rise Above $3,000
Ethereum’s bullish outlook relies heavily on institutions since the weak inflows into spot ETH ETFs have been a huge matter of concern for the altcoin. Nevertheless this is expected to change in the coming month.
In an interview with BeInCrypto, Matt Mena, Crypto Research Strategist at 21.co discussed the reason behind the terrible inflows.
“Ethereum’s recent lack of institutional demand can be traced back to the unfortunate timing of the ETH ETF launches. The ETFs faced several unfavorable factors, including their poorly timed debut during the summer—a period typically marked by lower activity in both crypto and traditional finance markets. This was further exacerbated by their release just two weeks before the Japanese Yen Unwind Trade, a significant macroeconomic event that brought considerable headwinds to risk assets, including cryptocurrencies,” Mena told BeInCrypto.
However, Ethereum’s road to $3,000 will also depend on a lot of external factors. Alvin Kan, COO of Bitget Wallet, discussed these factors with BeInCrypto,
“What could push ETH back to $3,000? First, technical innovation – projects in AI, payments, and restaking could deploy on Ethereum, bringing in new users and utility. Second, improved macro liquidity – after the Fed’s rate cut, we’re seeing more dovish signals. If the Fed cuts rates to levels closer to Ethereum’s staking yield (around 3.5%), ETH could regain its appeal as an income-generating asset, attracting more capital,” Kan told BeInCrypto
On the other hand, bearish cues from investors are also gradually arising. Ethereum’s 30-day MVRV Ratio currently sits at 6.5%, placing it in the danger zone. The MVRV Ratio is a key indicator measuring profits and losses, and when it falls between 3% and 12%, investors tend to realize profits by selling their holdings.
This behavior increases the risk of a selling-induced correction, which could weigh on Ethereum’s price.
The elevated MVRV Ratio suggests that Ethereum investors may start cashing out their profits, especially as market sentiment remains fragile. This selling pressure could lead to a correction, preventing Ethereum from making a solid move above $3,000 unless bullish momentum picks up.
Ethereum MVRV Ratio. Source: Santiment
ETH Price Prediction: Wait and Watch
Ethereum is currently trading at $2,642 and is on the verge of breaking out of the descending channel pattern it has been forming for the last two months. This pattern indicates that a breakout could lead to a 23% rise, targeting a price of $3,258, a much-anticipated level among investors.
However, this rise depends largely on improved institutional inflows. Even if Ethereum doesn’t achieve a 23% increase, consistent bullishness from investors and favorable macroeconomic conditions could push ETH beyond its $2,930 resistance, allowing it to breach the $3,000 mark.
Ethereum Price Analysis. Source: TradingView
On the other hand, if the breakout fails, Ethereum could remain stuck within the channel. This could lead to a potential test of the lower trendline around the $2,170 support level. This would invalidate the bullish outlook and delay any significant upward movement for the altcoin.
