In a recent analysis, ITC Crypto founder and CEO Benjamin Cowen pointed out a wedge chart pattern in the current cycle of ETH prices. This pattern bears resemblance to similar patterns observed in previous cycles, albeit on a much larger scale. Cowen highlighted that the ETH/BTC structure bottomed out after an interest rate cut in 2019, and history seems to be repeating itself with an impending rate cut on the horizon. This observation hints at a potential bullish outcome for ETH prices in the near future.
On the other hand, MN Consultancy founder Michaël van de Poppe has identified a bullish divergence in the ETH chart. This divergence remains valid, especially with a recent higher low recorded. According to van de Poppe, this bullish divergence could signify a break in the downward trend that ETH has been experiencing in recent months. Such a breakout could have a significant positive impact on the overall cryptocurrency market.
As of the latest update, ETH prices are showing a 2.6% increase, trading at $2,345. Despite this short-term uptick, ETH has witnessed a 46% drop from its high in mid-March 2024. Several factors have contributed to ETH’s underperformance, including concerns over diminishing network fees and an inflationary supply issuance. The recent support for EIP-4844 by Coinbase has been linked to the shift towards inflationary issuance and the decline in fees on the Ethereum network.
On-chain analytics from Santiment have revealed a four-month high in terms of network growth for Ethereum. A significant increase in new wallet creations, with over 126,000 new wallets generated in a single day, indicates a surge in network utility. This surge in network activity has coincided with a 7% increase in ETH prices since the weekend, sparking discussions about a potential price recovery. The analysts at Santiment have emphasized the correlation between network growth and price action, suggesting that a spike in network activity often precedes a price reversal in the mid-term.
The combination of chart patterns, bullish divergences, and network growth signals a potential turnaround for ETH prices in the coming days. While the cryptocurrency market remains volatile, these indicators offer hope for investors and traders looking for positive price movements in the near future.