As the cryptocurrency market continues to fluctuate, experts like Benjamin Cowen and Michaël van de Poppe have identified key chart patterns and divergences in the case of Ethereum (ETH). Cowen has pointed out a wedge chart pattern that resembles previous cycles but with a significant difference in magnitude. This pattern suggests a potential break in the downtrend, especially with an impending rate cut on the horizon. On the other hand, van de Poppe highlighted a bullish divergence, indicating a higher low on the ETH chart. This divergence could signal a reversal in the current downward trend, potentially affecting the entire market positively.
Currently, ETH is trading at $2,345, showing a 2.6% increase for the day. Despite bouncing off strong support levels, the asset has underperformed compared to its previous high in mid-March. One of the reasons for Ethereum’s poor performance could be attributed to concerns over diminishing network fees and an increase in inflationary supply issuance. The support for EIP-4844 by platforms like Coinbase has led to a shift towards inflationary issuance, impacting network fees. Additionally, the rise of meme coin minters on layer-2 networks like Base has contributed to the surge in network activity and revenue.
On-chain analytics from Santiment indicate a positive trend in Ethereum’s network growth. With over 126,000 new wallets created in a single day, the platform is experiencing a significant increase in utility. This surge in network activity has coincided with a 7% price increase over the weekend, leading analysts to speculate on a potential recovery. The correlation between network growth and price action suggests that major rises in activity could be indicative of a price reversal in the mid-term.
Overall, the current state of Ethereum presents a mix of challenges and opportunities for investors and traders. While chart patterns and divergences offer insights into potential trends, market factors like network fees and inflationary supply issuances play a crucial role in influencing price performance. With network growth on the rise, there is a possibility of a price reversal in the near future, highlighting the dynamic nature of the cryptocurrency landscape.
