On September 10, ITC Crypto founder and CEO Benjamin Cowen identified a wedge chart pattern this cycle similar to previous cycles in 2019 but several orders of magnitude larger.
ETH/BTC Chart Analysis
Cowen mentioned that the ETH/BTC structure bottomed after an interest rate cut in 2019 and appears to be mirroring that pattern now with an impending rate cut due next week. He added that the wedge formed by ETH this cycle had higher lows that are approximately 10 times those of the 2019 wedge. In 2019, ETH fell back into its wedge right before the first rate cut, similar to 2024. After the first rate cut in 2019, ETH fell below its wedge, and the ETH/BTC pair finally bottomed.
Forecasts and Expectations
MN Consultancy founder Michaël van de Poppe identified a bullish divergence that remains valid with a recent higher low on the ETH chart. He added, "The downtrend of the past months is likely going to be broken upwards. That could be a significant push for the entire market." In the meantime, ETH prices are currently trading up 2.6% on the day at $2,345. The asset reached a low of just below $2,200 on September 7, which was only marginally higher than its August 5 drop, suggesting it bounced off strong support twice.
Sustainable Ethereum Dynamics
Despite this, ETH has underperformed compared to Bitcoin, dropping 46% from its March 2024 high. Various factors have contributed to Ethereum's underperformance, including rising concerns over declining network fees and inflationary supply issuance. It has been suggested that Coinbase’s support for EIP-4844 was the catalyst for the shift to inflationary issuance and the decline in fees. Meanwhile, the company’s layer-2 network, Base, has seen a sharp increase in users and revenue. On-chain analytics platform Santiment reported on September 9 that Ethereum has hit a four-month high in network growth. Over 126,000 new wallets were created in one day, indicative of rising network utility. Since the news, ETH prices have ticked up 7%.
Analysts speculate that the rise in network activity may signal a potential price reversal. They note that such increases in network activity are rare when prices are dropping.
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