In a recent analysis, ITC Crypto founder Benjamin Cowen pointed out a wedge chart pattern in the current cycle of Ethereum, which bears similarity to patterns observed in previous cycles, albeit on a much larger scale. He noted that the structure of ETH/BTC hit a bottom after an interest rate cut in 2019, and the current pattern seems to be mirroring that with an impending rate cut expected soon.
On the other hand, MN Consultancy founder Michaël van de Poppe identified a bullish divergence on the ETH chart, which remains valid with a recent higher low. This indication could potentially lead to a breakout from the downward trend that Ethereum has been experiencing. van de Poppe stated, “The downtrend of the past months is likely going to be broken upwards. That could be a significant push for the entire market.”
As of now, ETH prices are trading up 2.6% for the day at $2,345. The cryptocurrency saw a dip to just below $2,200 on Sept. 7, which was slightly higher than its drop in August. Despite this, Ethereum has significantly underperformed compared to Bitcoin, with a 46% decrease from its high in mid-March 2024.
One of the reasons behind Ethereum’s poor performance has been attributed to concerns over diminishing network fees and an inflationary supply issuance. The support for EIP-4844 by Coinbase is said to have triggered the shift towards inflationary issuance and the decrease in fees. Furthermore, the company’s layer-2 network, Base, has experienced a surge in users (mainly meme coin minters) leading to an increase in network revenue.
On Sept. 9, on-chain analytics platform Santiment reported a four-month high in Ethereum’s network growth. More than 126,000 new wallets were created in a single day, indicating a rise in network utility. This surge in network activity has coincided with a 7% increase in ETH prices over the weekend, which has fueled speculation about a potential recovery. Santiment analysts highlighted the correlation between network growth and price action, suggesting that significant rises in network activity often signal a price reversal.
The Ethereum market is currently displaying various patterns and indicators that suggest a potential shift in trend. As the platform continues to experience growth in network activity and new wallet creations, it remains to be seen how these factors will impact the price movements of ETH in the near future.
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