The cryptocurrency market exhibited minimal movement on Friday, leaving traders with little excitement as Bitcoin (BTC) and Ethereum (ETH) continued their recent trends. At the time of writing, Bitcoin is hovering around $58,020, marking a modest 0.4% decline over the last 24 hours. Over the past month, Bitcoin has also shed 5% of its value, reflecting a period of low volatility.

While Bitcoin remains relatively flat, Ethereum has experienced more significant losses, with analysts forecasting that ETH might hit a bottom within the next 2-4 months. Ethereum, the second-largest cryptocurrency by market capitalization, is currently trading at $2,345, down 0.8% in the last day. Over the past month, ETH has underperformed Bitcoin, declining by a sharper 15% compared to Bitcoin’s 5% dip.

Ethereum’s Decline and the Road Ahead

Amid low trading volumes and market consolidation, analysts are closely watching Ethereum’s price movements. According to 10X Research, Ethereum is inching closer to longer-term oversold conditions, signaling a potential opportunity for investors.

“Traders should monitor medium-term reversal indicators such as RSI and Stochastics to catch signs of assets being oversold,” advises the research team at 10X. These indicators are commonly used to gauge whether a particular asset is underbought or oversold, which can offer traders insight into possible market reversals.

• The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. When the RSI falls below 30, it is typically considered an indication that an asset is oversold, potentially offering a buy signal for traders.
• Similarly, Stochastics compares a cryptocurrency’s closing price to its price range over a specific period, giving traders a perspective on potential market reversals. Like RSI, low stochastic values suggest that an asset may be nearing oversold conditions.

Despite these technical indicators, the team at 10X Research cautions against expecting an immediate price rebound. Instead, they predict that Ethereum could bottom out within the next two to four months as the market approaches an inflection point. Traders aiming to capitalize on these price movements should pay close attention to technical signals in the weeks ahead.

Bitcoin’s Stability and Diverging ETF Trends

While Ethereum faces the prospect of further declines, Bitcoin has maintained relative stability. Although it has shown minimal movement, some traders are eyeing the contrasting trends between Bitcoin and Ethereum in the ETF market.

On September 12, Bitcoin spot ETFs recorded a net inflow of $39 million, signaling continued institutional interest in the digital asset. Notably, ARK’s (ARKB) and Fidelity’s (FBTC) Bitcoin ETFs led the charge, contributing $18.3 million and $11.5 million in inflows, respectively.

By contrast, Ethereum spot ETFs have been experiencing outflows. On the same day, Ethereum spot ETFs registered a net outflow of $20.1 million, with the largest portion coming from Grayscale’s (ETHE) fund. This trend reflects a growing preference among institutional investors for Bitcoin, which continues to be viewed as a safer store of value, especially during periods of market consolidation.

Broader Economic Factors Shaping Crypto Markets

While technical indicators and ETF flows provide valuable insights into market dynamics, broader economic factors are also playing a crucial role in shaping the trajectory of cryptocurrency prices. James Davies, co-founder and chief product officer at Crypto Valley Exchange (CVEX.XYZ), noted that global macroeconomic trends are increasingly influencing digital assets.

“Globally, tech stocks are rallying, and inflation data has been better than expected in many major economies. These positive signs are boosting investor confidence, and cryptocurrencies are also feeling the impact,” Davies said.

He emphasized the importance of positive signals from China and the possibility of interest rate cuts in the U.S. as major drivers for future market growth. A favorable macroeconomic environment could provide the necessary tailwinds for Bitcoin and Ethereum to recover from their recent declines.

Upcoming U.S. Elections and Crypto Regulation

Looking ahead, market participants are also closely monitoring the U.S. presidential election in November. The election outcome could significantly impact the regulatory landscape for cryptocurrencies in the country, adding another layer of uncertainty to an already volatile market.

Darren Franceschini, co-founder of Fideum, believes that the election could serve as a turning point for the cryptocurrency market. “The outcome of these elections could have a profound effect on cryptocurrency regulation in the U.S.,” he said.

Franceschini pointed out that while a crypto-friendly president could act as a catalyst for market growth, the election period itself is likely to see high trading volumes but minimal price movement, as investors await clearer signals on future regulation.