ETH/BTC Trading Pair Highlights Bitcoin’s Dominance, But Will the Fed Rate Cut Change the Trend?
On September 10, ITC Crypto’s Benjamin Cowen observed a wedge chart pattern for the ETH/BTC trading pair, similar to previous cycles but on a much larger scale. Cowen noted that in 2019, the structure of the ETH/BTC pair bottomed after an interest rate cut, and it appears to be following a similar pattern now with an impending rate cut next week.
Meanwhile, Michaël van de Poppe of MN Consultancy identified a bullish divergence on the ETH chart, with a recent higher low. He believes this could lead to a break in the downward trend, which could have a significant impact on the entire market.
ETH prices are currently up 2.6% on the day, trading at $2,345. The coin experienced a drop to just below $2,200 on September 7, bouncing off strong support levels. However, ETH has underperformed compared to Bitcoin, experiencing a 46% drop from its high in mid-March.
One of the reasons for Ethereum’s underperformance is the rising concern over diminishing network fees and an inflationary supply issuance. Coinbase’s support for EIP-4844 has been pointed out as a catalyst for the flip to inflationary issuance and the decline in fees. Additionally, Coinbase’s layer-2 network, Base, has seen an influx of users, particularly meme coin minters, and an increase in network revenue.
Despite this, on-chain analytics platform Santiment reported that Ethereum has reached a four-month high in terms of network growth. Over 126,000 new wallets were created in one day, indicating rising network utility. Furthermore, ETH prices have seen a 7% increase since the weekend, leading analysts to speculate about a potential recovery.
Santiment analysts noted the correlation between network growth and price action, suggesting that significant rises in network activity often indicate a price reversal. This rise in network growth is particularly rare during price drops.