In a recent analysis by ITC Crypto founder and CEO Benjamin Cowen, a wedge chart pattern was identified in the current market cycle for Ethereum. This pattern bears resemblance to previous cycles in 2019, albeit on a much larger scale. Cowen pointed out that the ETH/BTC structure experienced a bottom after an interest rate cut in 2019, and with an impending rate cut next week, it seems to be mirroring a similar pattern now.
On the other hand, MN Consultancy founder Michaël van de Poppe highlighted a bullish divergence that is still valid, with a recent higher low on the ETH chart. This divergence could potentially lead to a break of the downward trend, signaling a significant push for the entire market according to Poppe.
Currently, ETH prices are up 2.6% on the day, trading at $2,345 at the time of writing. Despite bouncing off strong support levels twice, Ethereum has underperformed compared to Bitcoin, dropping 46% from its 2024 high in mid-March. One of the reasons for this underperformance is the growing concern over diminishing network fees and an inflationary supply issuance.
Analyzing on-chain data, Santiment reported that Ethereum has experienced a four-month high in terms of network growth. With over 126,000 new wallets created in a single day, there’s a clear indication of rising network utility. This surge in network activity has also contributed to a 7% increase in ETH prices since the weekend, sparking speculation about a potential recovery.
Santiment analysts noted the correlation between network growth and price action, suggesting that substantial rises in network activity are more indicative of a price reversal. This observation raises the possibility of a positive price trend for Ethereum in the near future, fueled by increased network utility and growing user adoption.
The current market trends and on-chain data suggest a promising outlook for Ethereum. With the identification of bullish chart patterns, growing network activity, and potential price reversals, Ethereum’s performance in the coming weeks could see a significant improvement. It is essential for investors and traders to stay informed about these developments and adapt their strategies accordingly to capitalize on the opportunities presented by the evolving market dynamics.
