Analyzing Ethereum’s Price Movement: 2018-2021 ETH Fractal Still in Play?

Key Takeaways

• The Ethereum (ETH) price has underperformed in the current bullish cycle.
• It recently invalidated a fractal, comparing it to the 2020 ETH movement.
• Are there any other valid possibilities remaining from the previous cycle?

Ethereum has been one of the most disappointing cryptocurrencies in the current bullish cycle, failing to match the growth of its rivals.

For most of 2023, Ethereum remained stagnant, while other Layer-1 competitors, such as Solana, experienced phenomenal growth.

Although 2024 started on a strong note, ETH’s price has since declined, even before its ETF approval in March. Moreover, the ETF numbers have been underwhelming.

Following the crash in July and August, Ethereum is now at risk of diverging from its 2020 bullish cycle. Will this trend continue, and if so, what does the future hold for Ethereum?

What Ethereum Movements Are Compared?

When comparing the two movements, the bottom of Dec. 2018 is assumed to be similar to the bottom of June 2022. So, the following increases could also be alike, here’s why:

1. These are the two most recent times the weekly RSI fell in oversold territory.
2. Both followed over 200% drops that lasted for more than 800 days.
3. Significant price increases succeeded both.

Using a fractal of the 2020 increase (white) at the June 2022 bottom shows that the movements were nearly identical until May 2024. Then, they diverged. More specifically, the 2020 fractal shows a rapid price increase, while the current movement shows a sharp ETH drop.

The RSI also confirms this departure. In 2020, the technical indicator fell below 50 once (black circle) and continued into overbought territory (white icon). Then, the ETH price accelerated its increase after the first local top.

In 2024, the RSI did fall below 50 before regaining its footing and increasing, reaching overbought territory (white icon) in March.  However, it has fallen since and fell below 50 in July. The divergence in the RSI occurred at the same time as that in price. So, it is safe to say the fractal is invalidated.

Analyzing Other Possibilities

If we consider Ethereum’s price bottom to have occurred in December 2022, the fractal pattern is still broadly in play. In this scenario, the ETH price has exhibited a truncated bottom, which aligns more closely with the duration of the decline when compared to 2020.

When projecting this fractal to the current Ethereum movement, the difference is not nearly as noticeable as in the previous comparisons. However, it is likely to deepen if the ETH price does not begin to move upward soon.

However, the weekly RSI does not fit this scenario either since it has fallen below 50. So, the shorter-term movement can help determine if ETH will follow the fractal.

Ethereum Price Prediction for 2024

The daily time frame chart shows the price of ETH has decreased inside a descending parallel channel since March. These channels often contain corrections.

Additionally, each bounce at the support trend line (white icons) has created long lower wicks, which are considered signs of buying pressure.

Then, both the bullish hammer candlestick on Sept. 4 and the bullish divergence in the daily RSI (green) could lead to trend reversals.

However, the channel’s midline will likely provide resistance at $2,600. Then, the resistance trend line, along with the $2,900 resistance area, will be difficult to surpass. Unless the ETH price moves above both these levels, the trend cannot be considered bullish.

On the other hand, a breakout from the channel will likely accelerate the rate of increase, substantiating the 2020 fractal.

Ethereum’s Fractals Not Invalid Yet

The Ethereum price movement since March 2024 has been bearish, a trend exacerbated by the drop that started in August. This has put the fractal that compares the ETH price movement to the previous cycle at risk.

However, if Ethereum bounces at the current level and breaks out, it may still have hope to begin a similar increase as to the one at the end of 2020 and the beginning of 2021.