ETH/BTC Pair Shows Bitcoin’s Dominance Amid Potential Fed Rate Cuts

On September 10, ITC Crypto founder and CEO Benjamin Cowen pointed out a wedge chart pattern this cycle that resembles previous cycles from 2019, but is significantly more pronounced.

He noted that the ETH/BTC structure experienced a bottom following an interest rate decrease in 2019, and it seems to replicate that pattern now, with a rate cut expected next week.

The wedge that #ETH developed this cycle included higher lows that are approximately 10 times larger than those of the 2019 wedge.

In 2019, #ETH fell back into its wedge just prior to the first rate cut, much like what we are seeing in 2024.

Following the initial rate cut in 2019, ETH dropped below its wedge, leading to a final bottoming out of #ETH / #BTC. pic.twitter.com/lAcJi8TBHX

— Benjamin Cowen (@intocryptoverse) September 10, 2024

Meanwhile, MN Consultancy founder Michaël van de Poppe identified a bullish divergence that remains valid due to a recent higher low on the ETH chart, suggesting a possible break from the downward trend.

“The downtrend observed over the past months is likely going to be breached upwards. This could provide a substantial boost for the entire market.”

As of now, ETH prices have increased by 2.6% for the day, trading at $2,345. The asset had plummeted to just under $2,200 on September 7, which was only slightly above its drop on August 5, indicating it rebounded off strong support levels twice.

However, ETH has lagged behind its larger counterpart, having declined 46% from its peak in mid-March 2024.

Fee Challenges Persist

The poor performance of Ethereum can be attributed to several factors, one being the rising anxiety over lowering network fees and the trend of inflationary supply issuance.

It has been proposed that Coinbase’s endorsement of EIP-4844 triggered a shift towards inflationary issuance and the subsequent fall in fees. Concurrently, the firm’s layer-2 network, Base, has experienced a ‘parasitic’ increase in users (mostly from meme coin minters) and a rise in network revenue.

The Ethereum community permitted @Coinbase, a private entity, to influence protocol development that favors their for-profit model.

Now, @Coinbase has essentially siphoned off all of ETH’s users and fees via @base, shifting all of it to the community as inflation. pic.twitter.com/WB58ME9vXb

— Pledditor (@Pledditor) September 9, 2024

Positive Developments Ahead?

On September 9, Santiment, an on-chain analytics platform, noted that Ethereum has reached a four-month high in terms of network growth.

Over 126,000 new wallets were created in a single day, reflecting “increased network utility,” according to the statement. This marks the largest single-day growth for new Ethereum wallets since May 5.

Additionally, ETH prices have risen by 7% since the weekend as market analysts speculate a potential recovery.

Ethereum has just attained a 4-month peak in network growth, occurring on a day (Sunday) that is typically the least active of the week. 126,210 new wallets created signifies rising network utility and expected price rebounds from the $2,200-$2,300 range. pic.twitter.com/zQaKbBdznK

— Santiment (@santimentfeed) September 9, 2024

Analysts at Santiment highlighted the relationship between network growth and price movements, stating:

“In general, regardless of the mid-term price trend, significant increases in network activity tend to signal a price reversal. Such rises in network growth are uncommon when prices are on a downward trajectory.”