Ethereum tops Bitcoin in daily performance after altcoin season repeat prediction

• Ethereum is poised to replicate its performance, where its price doubled that of Bitcoin in a matter of months, says Steno Research analyst.
• The report noted that the Fed rate cut will boost activity on the chain and fuel ETH growth.
• Ethereum bulls could continue buying pressure to support the rally if ETH recovers from a key support level.

Ethereum (ETH) rose 3% on Friday following a recent report from Steno Research that the Federal Reserve (Fed) rate cut earlier in the week would trigger an ETH rally similar to its performance in the last altcoin season.

Daily Market Reasons: Ethereum is ready to shine again

Following the Fed’s 50 basis point rate cut, Steno Research predicted that Ethereum will replicate its performance in 2021, where its value has increased by more than 2x that of Bitcoin.

Ethereum has been a very poor performer in the current bull cycle, only rising about 8% compared to Bitcoin’s 43% since the beginning of the year. For example, the ETH/BTC pair, which compares the price of Ethereum against Bitcoin, hit a low last seen in April 2021 earlier in the week.

However, analyst Mads Eberhardt wrote that Ethereum’s fortunes are about to change, stating that the Fed’s rate cut will cause an increase in activity on the chain, boosting ETH’s value in the process.

The report noted how the rapid growth of decentralized finance (DeFi), stablecoin issuance, and non-fungible tokens (NFTs) sparked an altcoin season that saw ETH surpass Bitcoin during the last bull run. “Just like in 2021, when Ethereum doubled its value against Bitcoin in just a few months, it is now poised to shine again,” Eberhardt wrote.

While it is too early to draw conclusions, the price change of ETH against Bitcoin in the last few hours aligns with the prediction. BTC fell 0.7% against ETH’s more than 3% rise.

However, investors should also be cautious as rising Ethereum exchange reserves indicate the potential for selling pressure and may cause a temporary price correction.

ETH exchange reserve

Meanwhile, Ethereum ETFs saw net inflows of $5.2 million on Thursday. Notably, every other issuer saw zero flows except for BlackRock’s ETHA.

Ethereum could break out of the 100-day SMA to continue the rally

Ethereum is trading around $2,540 on Friday, up 3.3% on the day. Over the past 24 hours, ETH has seen $25.3 million in liquidations, with liquidated long and short positions accounting for $9.67 million and $15.63 million, respectively.

ETH is attempting a correction on the 4-hour chart after approaching price levels around the $2,595 resistance. On the downside, ETH could bounce around the 100-day simple moving average (SMA) to retest the $2,595 resistance level.

ETH/USDT 4 Hour Chart

A successful move above this level could see ETH tackle the $2,817 resistance it has held since the August 5 market crash. Notably, the price of $2,817 served as a key support level for over four months after ETH’s decline from its yearly high in March.

However, if ETH breaks below the 100-day SMA, it could find support around the $2,395 level. If the bulls defend this support level, it could signal a growing uptrend.

The 4-hour Relative Strength Index (RSI) and Stochastic Momentum indicators are trying to break down from their overbought regions at 70 and 80, respectively, at the time of writing.

In the short term, ETH could rise to $2,572 to liquidate $39.68M worth of positions.

A daily candlestick close below $2,395 will invalidate the thesis.