Recently, Benjamin Cowen, the founder and CEO of ITC Crypto, highlighted a wedge chart pattern in the current cycle that bears resemblance to patterns seen in previous cycles, specifically in 2019. This wedge pattern, according to Cowen, is much larger in scale this time around. He pointed out that the structure of the ETH/BTC pair bottomed out after an interest rate cut in 2019, and with an impending rate cut on the horizon, it seems to be following a similar pattern now. On the other hand, Michaël van de Poppe, the founder of MN Consultancy, identified a bullish divergence in the ETH chart, which remains valid with a recent higher low. This bullish divergence could potentially lead to a break in the downward trend, resulting in a significant push for the entire market.
As of the time of writing, ETH prices are up by 2.6% on the day, standing at $2,345. The cryptocurrency experienced a dip to just below $2,200 on Sept. 7, but managed to bounce back from strong support levels. However, despite this positive movement, Ethereum has underperformed compared to Bitcoin, dropping by 46% from its peak in mid-March 2024. This underperformance can be attributed to various factors, including concerns over diminishing network fees and an inflationary supply issuance. The support for EIP-4844 by Coinbase has been linked to the shift towards inflationary issuance and the decline in fees. In addition, the surge in users on the company’s layer-2 network, Base, has mainly comprised meme coin minters, leading to an increase in network revenue.
On Sept. 9, on-chain analytics platform Santiment reported a four-month high in network growth for Ethereum. A total of over 126,000 new wallets were created in a single day, indicating a rising network utility. This surge in network activity has coincided with a 7% increase in ETH prices since the weekend, prompting speculation about a potential recovery. According to Santiment analysts, there is a correlation between network growth and price action, suggesting that significant rises in network activity are often indicative of a price reversal.
The Ethereum market is currently experiencing interesting developments, including the identification of chart patterns, price movements, and network growth. These factors are likely to impact the future trajectory of Ethereum prices and overall market sentiment.
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