On Sept. 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.
He said that the ETH/BTC structure bottomed after an interest rate cut in 2019, and it appears to be mirroring that pattern now with an impending rate cut due next week.
Meanwhile, MN Consultancy founder Michaël van de Poppe identified a bullish divergence which was still valid with a recent higher low on the ETH chart. This could lead to a break of the downward trend, 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.”
ETH prices are currently trading up 2.6% on the day at $2,345 at the time of writing. The asset tanked to a low of just below $2,200 on Sept. 7, which was only marginally higher than its Aug. 5 drop, suggesting that it bounced off strong support twice.
However, ETH has underperformed its big brother, dropping 46% from its 2024 high in mid-March.
Fee Woes Continue
There are several reasons why Ethereum has performed so badly , and one is the rising concern over diminishing network fees and an inflationary supply issuance.
It has been suggested that Coinbase’s support for EIP-4844 was the catalyst for the flip to inflationary issuance and the decline in fees. Meanwhile, the company’s layer-2 network, Base, has seen a ‘parasitic’ surge in users (primarily meme coin minters) and an increase in network revenue.
Good New Coming Soon?
On Sept. 9, on-chain analytics platform Santiment reported that Ethereum has hit a four-month high in terms of network growth.
More than 126,000 new wallets were created in one day, which is “indicative of rising network utility,” it stated. It is the highest single day for new Ethereum wallets since May 5.
Moreover, ETH prices have ticked up 7% since the weekend as analysts speculate over a potential recovery.
Santiment analysts remarked on the correlation between network growth and price action, stating:
“Generally, whatever the mid-term trend is for prices, major rises in network activity are more indicative of a price reversal. This rise in network growth is more rare when prices are dropping.”
