In a recent analysis by ITC Crypto founder Benjamin Cowen and MN Consultancy founder Michaël van de Poppe, a wedge chart pattern was identified in the current cycle of Ethereum that resembles patterns seen in previous cycles. Cowen pointed out that the ETH/BTC structure bottomed after an interest rate cut in 2019, similar to what is happening now with an impending rate cut next week. On the other hand, van de Poppe highlighted a bullish divergence with a recent higher low on the ETH chart, suggesting a potential break of the downward trend. This optimistic outlook could lead to a significant push for the entire market.
As of now, ETH prices are trading up 2.6% on the day at $2,345, showing resilience after dropping to a low of just below $2,200 on Sept. 7. Despite this bounce off strong support levels, Ethereum has underperformed compared to its previous highs, dropping 46% from its peak in mid-March 2024. The 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 cited as a catalyst for the switch to inflationary issuance and the subsequent decline in fees.
On Sept. 9, on-chain analytics platform Santiment reported a significant increase in network growth for Ethereum. More than 126,000 new wallets were created in a single day, marking the highest daily number since May 5. This surge in network activity is indicative of rising network utility, suggesting a positive correlation with price action. Analysts at Santiment highlighted the connection between network growth and potential price reversals, indicating a possible recovery for ETH prices in the near future.
Ethereum seems to be on the brink of a potential recovery as positive indicators such as the wedge chart pattern, bullish divergence, and network growth point towards a favorable outlook. Despite the challenges faced by Ethereum in recent months, there is renewed optimism among analysts and investors regarding the future performance of the cryptocurrency. With the upcoming rate cut and increasing network utility, Ethereum could experience a significant push in the market, leading to a price reversal and potential new highs.
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