Quick Takeaways
- Ethereum might dip into the $3,000s before bouncing hard in October
- A bearish-looking setup could fool traders into selling too early
- Fundamentals remain strong, pointing to long-term growth
Ether Rally Trap Might Look Bearish Before It Explodes
September might start off looking rough for Ethereum, but don’t be fooled this could just be setting up for what some are calling a classic Ether rally trap.
Crypto analyst Johnny Woo believes Ethereum is about to pull off one of its oldest tricks: faking out the market with a bearish chart pattern before turning around and rallying.
He expects a head and shoulders pattern could form, spooking traders into selling.
But here’s the twist October could completely flip the narrative. “If it plays out,” Woo says, “it might be the biggest bear trap I’ve ever seen.”
This trap would shake out weak hands those who panic and sell early only to watch Ethereum bounce back in what the crypto community has cheekily nicknamed “Uptober.”
We’ve witnessed things like this previously. After plunging from $3,950 to $2,750 in September 2021, ETH surged to a new all-time high a few weeks later. Therefore, for those who are paying attention, this could be a setup even though it could feel familiar.
Ether Rally Trap Could Start With a Quick Drop to Support
While the idea of a sudden rally is exciting, the short-term setup might look scary at first. Analyst Daan Crypto Tradesnotes that ETH has been bouncing around in a tight range between $4,300 and $4,500, making it hard to read.
He points out that a dip to around $4,160 a key moving average could be the moment things start to turn. If Ethereum falls to that level, many traders might assume the worst.
But in reality, it could be the beginning of an Ether rally trap where the market dips just enough to push people out before surging upward. That said, not everyone is convinced technical patterns tell the whole story.
Henrik Andersson, Chief Investment Officer at Apollo Capital, suggests we should focus more on fundamentals than on repeating patterns.
“It’s more prudent to look at the big picture rather than just what happened last September,” he says.
And that big picture includes macro events like the upcoming U.S. jobs report and Federal Reserve interest rate decision both of which could swing prices either way in the short term.
Why Fundamentals Still Outshine the Ether Rally Trap Hype
While short-term traders might get caught in the drama of an Ether rally trap, long-term investors may want to zoom out. Ethereum is still at the center of almost everything happening in Web3 from stablecoins to DeFi protocols to NFT infrastructure.
Gracie Lin, CEO of OKX Singapore, says Ethereum’s long-term growth story remains strong, thanks in part to clearer regulation and rising adoption of stablecoins.
So even if ETH dips in the coming weeks, it doesn’t mean the overall trend has changed. In fact, these kinds of shakeouts can be opportunities not warnings if you know what to look for.
Right now, Ethereum is still trading about 11.7% below its all-time high, which is a relatively soft pullback compared to previous years. That means if the reversal happens in October, there could be a real chance to catch the next leg up.
