Ethereum jumps over 3% following ETH contrarian bet bit prediction

• Ethereum rose over 3% after the crypto market anticipated a 50 basis point Fed rate cut.
• Ethereum looks like a potential contrarian bet for now, Bitwise official says.
• Ethereum could rise 17% to $2,817 if it sustains a high-volume move above $2,395.

Ethereum (ETH) rose 3% on Tuesday as anticipation grows for a 50 basis point interest rate cut by the US Federal Reserve (Fed). Meanwhile, Bitwise’s weekly note noted that Ethereum still offers more opportunities and looks like a contrarian bet.

Ethereum still presents a good opportunity for growth amid poor performance

Ethereum rallied alongside most crypto-assets in the broader cryptocurrency market in anticipation of a 50 basis point rate cut by the Fed.

However, most crypto investors have criticized the top altcoin in recent months after its poor performance compared to Bitcoin and Solana. The price of Ethereum has been relatively flat since the start of the year, while Bitcoin and Solana have risen an average of 38% and 31%, respectively.

In a recent note, Bitwise Chief Investment Officer (CIO) Matt Hougan discussed Ethereum’s recent underperformance and his price predictions for the coming months.

Hougan noted that some of the reasons why investors are bearish on ETH include the SEC’s concern that staked ETH is a security, the unclear regulatory status of protocols in the DeFi ecosystem, competition from newer chains like Solana, declining revenue/ fees at its level 1, and the disappointing performance of Ethereum ETFs.

While these are real reasons for concern, Hougan pointed out that Ethereum still leads the crypto market in several key metrics.

According to Hougan, Ethereum is home to over 50% of the total stablecoin supply, 60% of DeFi’s total value locked (TVL), the innovative prediction market Polymarket, the most active users and the most active developer ecosystem. Big traditional companies like BlackRock and Nike have also chosen Ethereum to launch their blockchain products.

“It (Ethereum) is like the Microsoft of blockchains. Everyone wants to talk about Google and Slack and Zoom, and with good reason: Each of them brought game-changing technology to market. But Microsoft is still bigger than everyone said. together,” Hougan said. As a result of these reasons, he noted that Ethereum still presents a good opportunity for growth.

“I suspect the market may re-evaluate Ethereum as we approach the November election and any regulatory clarity that emerges. For now, it looks like a potential contrarian bet until the end of the year,” Hougan said.

Meanwhile, Ethereum ETFs saw a net outflow of $9.4 million on Monday following the exodus of $13.8 million and $2.1 million into Grayscale’s ETHE and Bitwise’s ETHW, respectively. On the other hand, BlackRock’s ETHA and Grayscale Mini ETH Trust saw inflows of $4.2 million and $2.3 million, respectively.

Ethereum could rise 17% if it sustains a move above $2,395

Ethereum is trading above $2,360 on Tuesday, up 3% on the day. Over the past 24 hours, ETH has seen $26.4 million in liquidations, with long and short liquidations accounting for $13.99 million and $12.41 million, respectively.

On the 4-hour chart, Ethereum is trying to break a downtrend line and the key $2,395 resistance of a rectangle. If ETH completes this move, it could start another extended move in the $2,395 to $2,817 price range, where it has traded most over the past month.

ETH/USDT 4 Hour Chart

A high volume sustained move above the $2,395 resistance will turn it into a support and see it attempt a 17% move towards the $2,817 level. However, if ETH sees a rejection around this level, it could drop towards the support level around $2,200.

The 50-day, 100-day, and 200-day simple moving averages (SMA) represent potential rising resistance.

The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are above their neutral levels of 50, indicating strong buying pressure on the 4-hour chart.

A daily close of the candlestick below the $2,111 level will invalidate the thesis.

In the short term, ETH could drop to $2,288 to liquidate $40.34M worth of positions.