In the recent analysis by ITC Crypto founder and CEO Benjamin Cowen, a wedge chart pattern was identified in the current market cycle of Ethereum. This pattern bears resemblance to previous cycles in 2019, albeit on a much larger scale. Cowen pointed out that the ETH/BTC structure hit a bottom after an interest rate cut in 2019, and a similar pattern seems to be emerging now with an impending rate cut on the horizon. This observation indicates a potential shift in market dynamics that could impact Ethereum’s price movement.
On the other hand, Michaël van de Poppe, founder of MN Consultancy, highlighted a bullish divergence in the Ethereum chart that remains valid, supported by a recent higher low. This divergence suggests a possible break in the downward trend, which could act as a significant catalyst for the overall market. Currently, Ethereum prices are showing a 2.6% increase, trading at $2,345. The recent price movement saw ETH dropping to a low of just below $2,200 on Sept. 7, rebounding from a strong support level that was tested twice.
Despite the recent positive indicators, Ethereum has underperformed in comparison to Bitcoin, experiencing a 46% drop from its 2024 high in mid-March. One of the reasons behind this poor performance is the growing concern over diminishing network fees and an inflationary supply issuance. The support for EIP-4844 by Coinbase has been cited as a factor leading to the flip to inflationary issuance and the decline in network fees. Additionally, the platform’s layer-2 network, Base, has witnessed a surge in users, particularly meme coin minters, contributing to an increase in network revenue.
A recent report by on-chain analytics platform Santiment revealed that Ethereum has seen a four-month high in network growth, with over 126,000 new wallets created in a single day. This surge in network activity suggests a rising utility for Ethereum and has been associated with a 7% increase in ETH prices since the weekend. Analysts are now speculating about a potential price recovery, drawing a correlation between network growth and price action. The general consensus is that significant rises in network activity often precede a price reversal in the mid-term trend.