Ethereum (ETH), 'Signal' of Entering Major Bull Market After 5 Years...Warning of Short-Term 20% Correction

▲ Ethereum (ETH)/AI-generated image

The altcoin market is ending its long slump. As the macroeconomic business cycle expansion fully begins, an analysis suggests it will enter the strongest bull market in 5-6 years.

Dan Gambardello, host of the cryptocurrency-focused YouTube channel Crypto Capital Venture, analyzed in a video uploaded on September 27 (local time) that the trendline formed on the Ethereum (ETH) chart is acting as a crucial watershed dividing short-term corrections and a long-term bull market. Gambardello stated, "The altcoin market has not experienced a true bull run since 2020 and 2021," adding, "Now, as the multi-year period of economic contraction ends and economic expansion begins, is the decisive moment for a transition to a new bullish cycle."

The altcoin dominance indicator, excluding the top 10 coins, also shows strong synchronization with the macroeconomic cycle. He pointed out that the altcoin market is moving in step with the business cycle, represented by the Manufacturing Purchasing Managers' Index (PMI), and the schedule for the end of Quantitative Tightening (QT). The sharp price correction after the Federal Reserve's (Fed) Quantitative Tightening ends in December 2025 is identical to the normalization phase experienced during the end of tightening in July 2019, and the recent upward turn in the altcoin market share indicator signals the entry into a full-fledged economic expansion phase.

In terms of technical analysis, the inverse head and shoulders pattern and the upper resistance trendline on the daily chart are drawing attention. Gambardello explained that Ethereum could experience a short-term retracement correction of up to 20% in October, along with high volatility, before breaking above the upper resistance line. The 20-day moving average on the daily chart is formed at $2,500, the 50-day line at $2,300 to $2,400, and the 200-day line at $2,000 to $2,100, respectively, suggesting that these moving averages will be tested as key support levels if a short-term resistance line is encountered.

He recalled precedents where Ethereum formed an inverse head and shoulders pattern during its bottoming process in past tightening phases, followed by a strong upward wave. The current neckline and resistance trendline formed on the chart will act as a signal to drive a long-term bull market, even if a temporary correction occurs, as it will convert into a support line in the future. Even if fluctuations of around 20% occur in the short term, if the structure of higher lows is maintained, it is assessed that the technical foundation for a major altcoin bull market will be completed.

[Article Key Summary]

-Dan Gambardello analyzed that Ethereum is entering its largest bull market since 2020-2021, coinciding with the economic expansion cycle.

-After overcoming a rough correction phase following the end of Quantitative Tightening, altcoin dominance (excluding the top 10 coins) has begun to turn upwards.

-There is a possibility of a short-term correction of up to 20% in October near the daily resistance line, but a major uptrend remains valid if the $2,000-$2,500 support line is defended.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*