Recently, ITC Crypto founder and CEO Benjamin Cowen pointed out a wedge chart pattern in the current cycle, highlighting similarities to previous cycles in 2019 but on a larger scale. He mentioned that the structure of ETH/BTC bottomed after an interest rate cut in 2019 and predicted a similar pattern with an impending rate cut next week. This observation suggests a potential bullish movement for Ethereum in the near future.
ETH prices have seen a 2.6% increase, currently trading at $2,345. The asset dipped to a low of just below $2,200 on Sept. 7, slightly higher than its drop in August. Despite this recent recovery, ETH has underperformed compared to previous highs, experiencing a 46% drop since mid-March 2024. Several factors contribute to Ethereum’s poor performance, including concerns over diminishing network fees and a rise in inflationary supply issuance.
The decision by Coinbase to support EIP-4844 has been suggested as a crucial factor in the shift towards inflationary issuance and the decline in fees for Ethereum. Additionally, the company’s layer-2 network, Base, has witnessed a surge in users, primarily meme coin minters, leading to an increase in network revenue. These developments have raised questions about the sustainability and efficiency of Ethereum’s network structure.
Despite the challenges faced by Ethereum, recent data from on-chain analytics platform Santiment shows promising signs for the network. Ethereum has experienced a four-month high in terms of network growth, with over 126,000 new wallets created in a single day. This surge in network activity is seen as a positive indicator of rising network utility. Moreover, ETH prices have seen a 7% increase over the weekend, sparking speculation about a potential recovery in the near future.
Santiment analysts have highlighted a correlation between network growth and price action, suggesting that major rises in network activity could signal a price reversal. The growing network utility of Ethereum, coupled with the impending rate cut and bullish divergences identified by industry experts, may pave the way for a positive trend reversal for ETH prices. As the market continues to evolve, it will be interesting to see how these factors play out and impact the overall performance of Ethereum in the coming weeks.
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