Ethereum (ETH) price prediction for October 2021

Ethereum price had a relatively difficult September. After soaring to a multi-month high of $4,032 early during the month, the price then crashed by more than 34% to a low of $2,655. It is trading at $2,950, which is about 13% below where it started the month. 

ETH September review

Ethereum price declined sharply in September, bringing its total market capitalization to more than $348 billion. It was not alone. Bitcoin and other altcoins declined in September as well. The BTC price declined from a high of more than $52,000 to below $40,000. 

The total market capitalization of all cryptocurrencies tracked by CoinMarketCap crashed from more than $2.3 trillion to about $1.8 trillion.

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Ethereum declined for several reasons in September. First, historically, September is usually one of the worst months for stocks and other assets. Indeed, the Dow Jones and the S&P 500 indices had their worst month in more than 9 months in September. This is notable since Ethereum tends to have a correlation with these indices. 

Second, risks rose in the market, pushing more investors to safe-havens. Indeed, the closely watched fear and greed index declined to the fear zone in September while the CBOE Volatility Index (VIX) rose by almost 30% during the month. In most periods, investors tend to rush to safe havens when risks arise.

There were several risks that emerged in September. Last week, the People’s Bank of China (PBOC) announced that all cryptocurrency transactions were illegal. The announcement was notable since it included offshore companies like Huobi and Binance. 

Another risk came from the United States, where there is a likelihood that the government will default. A default of the American government debt would have a major implication in the financial market.

In October, the key event that will move Ethereum price will be the Altair upgrade that will happen in the final week of the month. In a note, a key developer of the upgrade said:

“This upgrade brings light-client support to the core consensus, cleans up beacon state incentive accounting, fixes some issues with validator incentives, and steps up the punitive params as per EIP-2982.”

Historically, Ethereum prices tend to rise ahead of a major network upgrade. Will history repeat itself in October?

Ethereum price prediction

Ethereum Price

The daily chart shows that the ETH price made a strong recovery starting from July, when it crashed to a low of $1,692. This trend then lost momentum in September as the price approached its all-time high of $4,325. 

Today, Ethereum is trading along the 50-day and 100-day exponential moving averages (EMA). It also seems like it has formed a bearish pennant pattern. 

Therefore, I suspect that the coin will break out lower in the first week of October and then cruise to a new all-time high ahead of the Altair upgrade.