Ethereum (ETH), Axie Infinity (AXS), Polygon (MATIC), Chiliz (CHZ) and Cosmos (ATOM) are cryptocurrencies whose price over the next six months are expected to perform better than last six.
The Halloween effect is a market timing trading strategy that suggests that stocks or cryptos prices will perform better in the six-month period from Oct. 31 to April 30 rather than between April 30 and Oct. 31.
The strategy has historically outperformed the efficient market hypothesis, providing excess returns in comparison to the average stock or crypto price. This led to the creation of the mantra “Sell in May and go away.”
To simplify, the strategy suggests that cryptos perform better in the winter months rather than in the summer months. This slogan proved prophetic in the cryptocurrency markets this year since a price drop of 50% has been ongoing since the beginning of May.
As a result, we will look at five cryptocurrencies whose price could greatly outperform their May to Oct 2022 performance in the next six months. The coins will be chosen for both their long-term outlook based on their price charts and potential new developments in the next six months.
ETH Price Could Move Above $2,000
Ethereum price has been falling inside a descending parallel channel since Aug. 14. Such channels usually contain corrective movements, meaning that an eventual breakout is expected. The downward movement led to a low of $1,220 on Sept. 21.
Afterward, ETH price bounced at the confluence of the $1,250 support area and the support line of the channel. Since then, both the RSI and Ethereum price have created higher lows (green line). This is a sign of the creation of a bullish structure.
Therefore, both technical indicators and the price action for Ethereum provide a bullish outlook. A breakout from the parallel channel would confirm that the bullish price reversal has begun for this crypto.
In that case, an upward movement towards at least $2,360 would be expected. The ETH price target is found by measuring the length of the previous increase (highlighted) and projecting it to the current low.
Additionally, the long-awaited Ethereum news about the Merge went live on Sept. 15. This finally changed the consensus mechanism to proof-of-stake, alleviating numerous concerns about the sustainability of the blockchain and creating a new fork.
Since the beginning of May, Ethereum price has fallen by 53% (highlighted in red). So, in order to outperform this period, ETH price would have to be above $600 in May 2023.
Due to the bullish readings from the daily time frame, it seems unlikely that ETH price will be below $1,300 in May 2023, let alone $600.
As a result, Ethereum price is expected to have a positive price performance from Nov. to April.
The performance of Axie Infinity since the beginning of May has been underwhelming, to say the least. So far, the price has decreased by roughly 66%. AXS price fell to a new yearly low of $11.05 on Oct. 13.
However, AXS price is approaching a crucial support area at $9. The area provided resistance in May 2021 (red icon) before turning to support in July (green icon).
As a result, a considerable bounce in AXS price is likely once the price gets there.
In order to underperform over the next six months, Axie Infinity price would have to decrease by more than 66%. In turn, this would lead to lows below $3.80.
Considering that there is very strong support at $3.50 that is also likely to initiate a bounce, this seems unlikely to happen to Axie Infinity.
Numerous new releases are scheduled until the end of the year, such as the mainstream release of the game in IOS/Android, land gameplay and Lunacia SDK alpha.
When combined with the growing Axie Infinity ecosystem and the first-ever AxieCon, it is possible that the game will regain a lot of its previous buzz from cryptos enthusiasts and potentially lure in even more new players.
Finally, it is worth mentioning that the mint-to-burn ratio of the Smooth Love Potion (SLP), the utility cryptos for the game, has finally stabilized. Over the past month, the number of burned cryptos has greatly outpaced that of minted tokens.
Matic Price Is Nearing the End of the Correction
The performance of Polygon price since the beginning of May has been more positive than that of ETH price and AXS price, since MATIC price has fallen by only 29%.
The main reason for this is the massive upward reaction once the MATIC price fell to its yearly low of $0.31. The ensuing five-wave increase (black) caused a 200% appreciation, leading to a high of $1.05.
MATIC price has been correcting inside a descending parallel channel since, and it seems that it is gradually going to fall towards the 0.618 Fib retracement support level at $0.60.
This price level also coincides with the support line of the channel. Afterward, a bounce would be expected for this crypto.
If the ensuing increase has the same magnitude as the previous one, this will lead to a high of $1.35.
In order to outperform the performance of the previous six months, MATIC price has to hold on above $0.55.
Can CHZ Price Reach New All-time High?
Chiliz has had a fairly neutral performance since the beginning of May. It is currently incrementally above the May 1 price of $0.18. However, the long-term outlook for CHZ looks decisively bullish.
With its June lows (green circle), it looks like CHZ has completed a fourth wave pullback (red). So, even though CHZ price has had a neutral performance since the beginning of the May, it is not out of the question that the price could increase towards a new all-time high by the end of the year.
Moreover, the weekly RSI has broken out from its bearish trend line (green line) and is attempting to hold on above the 50 line.
Since the mainnet 2.0 is expected to launch by the end of the year, this could further enhance the price performance of CHZ.
Cosmos (Atom) Price Breaks Out From Long-term Resistance
The performance of ATOM price since the beginning of May has not been terrible, since Cosmos price has fallen by only by 37%.
More importantly, Cosmos price has broken out from a long-term descending resistance line that had previously been in place since the all-time high. This is a sign that the price correction has come to an end.
In order to underperform over the next six months, ATOM price would have to reach a close below the $8.50 horizontal area and resume its downward movement towards new lows.
The Lambda upgrade for Cosmos will transpire sometime in Q1 2023, potentially providing a positive effect for the price of ATOM and the cryptos in its ecosystem.
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