ETH/BTC Trading Pair Analysis: Will Federal Reserve Rate Cuts Influence Market Trends?
Summary
On September 10, ITC Crypto’s Benjamin Cowen identified a large wedge pattern in ETH/BTC mirroring 2019 patterns, predicting a potential rise following the anticipated rate cut. MN Consultancy’s Michaël van de Poppe noted bullish divergence in Ethereum, suggesting an upward trend break. Despite ETH’s 46% drop since March peak, recent data from Santiment shows a surge in new wallets, indicating rising network utility. Ethereum’s price is recovering, but ongoing issues such as inflationary pressures and fee declines remain persistent challenges.
On September 10, Benjamin Cowen, Founder and CEO of ITC Crypto, highlighted a significant wedge chart pattern emerging in the current cryptocurrency cycle. This pattern bears resemblance to one observed in 2019 but is on a much larger scale. Cowen noted that the ETH/BTC structure bottomed shortly after an interest rate cut in 2019, suggesting that a comparable pattern may unfold in the upcoming period as another rate cut is anticipated next week. Furthermore, Michaël van de Poppe, Founder of MN Consultancy, has indicated a bullish divergence in Ethereum’s trading chart. He believes that with the establishment of a recent higher low, the persistent downward trend may soon be broken, potentially propelling the entire market higher. “The downtrend of the past months is likely going to be broken upwards. That could be a significant push for the entire market,” he stated. As of the latest update, Ethereum (ETH) prices are up by 2.6% to $2,345, rebounding from a recent low of just below $2,200 observed on September 7. This value indicates a consistent support level, although Ethereum has still seen a substantial decline of 46% since reaching its peak in March 2024. Concerns regarding Ethereum’s performance stem from various factors, notably the growing issues of decreasing network fees and inflationary supply issuance. Analysts have suggested that Coinbase’s backing for EIP-4844 has significantly contributed to this inflationary trend and the resultant drop in fees. Concurrently, the layer-2 network Base has reportedly witnessed a surge in users, primarily driven by meme coin projects, which has adversely affected Ethereum’s revenue stream. In a positive turn, on September 9, Santiment, an on-chain analytics platform, reported that Ethereum experienced its highest network growth in four months, with over 126,000 new wallets created in one day—marking the largest daily increase in new Ethereum wallets since May 5. This surge is perceived as an indicator of heightened network activity and utility. Analysts from Santiment emphasized the correlation between network growth and price movements, remarking, “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.” Lastly, market sentiment appears to be leaning towards a potential recovery, as Ethereum prices have climbed by 7% since the weekend amidst optimistic forecasts from various analysts.
Bitcoin (BTC) continues to dominate the cryptocurrency market, serving as a benchmark for investments. Recent interest rate cuts by the Federal Reserve have historically influenced market movements and trader sentiments significantly. The relationship between ETH and BTC is critical, as ETH often seeks to establish its trajectory based on BTC’s performance. Analyst observations of chart patterns and divergences can provide insights into future market behavior. As Ethereum faces both community-driven factors like EIP-4844 and external economic influences such as interest rates, the upcoming weeks will be pivotal in determining its recovery and potential price trends.
In conclusion, as Ethereum appears to be poised for a possible reversal from its recent downtrend, the interplay of economic factors such as the anticipated Federal Reserve rate cut and significant growth in network activity could pave the way for a renewed bullish sentiment. Analysts remain cautiously optimistic about the potential shift in price trends, but concerns regarding network fees and inflationary pressures will need to be addressed for Ethereum to sustain any upward momentum.
Original Source: cryptopotato.com
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