“Ethereum Reversal? Key Condition Could Indicate ETH/BTC Bottom”

ETH bounced back above $2500 following last week’s Fed adjustment, strengthening the ETH/BTC pairing.
According to Cowen, the ETH/BTC pair could find a bottom if it manages to reclaim the 50-day MA in the short term.

Despite the launch of the US spot ETH ETF in Q3, market interest in Ethereum [ETH] has waned. ETH saw a 25% drop in Q3, reaching a historic low within the ETH/BTC pairing, which measures its performance relative to Bitcoin [BTC].

However, following the Fed’s recent pivot, the altcoin managed to climb back to $2500 after three days of consecutive gains.

This rally was also supported by a net influx of $8.2 million into US spot ETH ETFs over the last two trading days.

When Might ETH/BTC Find a Bottom?

Nevertheless, crypto analyst Benjamin Cowen expressed caution regarding the potential strength of ETH and the possibility of the ETH/BTC pairing hitting a bottom.

Cowen pointed out that finding a bottom in the ETH/BTC pairing might be challenging if it does not reclaim the 50-day Moving Average (MA), referencing trends from 2016 and 2019.

“After #ETH / #BTC broke down in 2016 and 2019, the lowest point was reached after ETH/BTC moved back above its 50D SMA…So as long as ETH/BTC is < 50D SMA, there’s still potential for ETH/BTC to drop further.”

Still, he mentioned that the pair could regain strength if it rises above the 50-day MA, currently positioned at 0.04255.

“However, once the 50D SMA is breached, I think it’s more likely that we would have found the bottom.”

Source: Cowen/X

Trading above the 50-day MA typically indicates positive short-term momentum.

Meanwhile, some large investors have taken profits from the recent rise in ETH prices. According to Spot On Chain, a notable whale has liquidated 15K ETH worth $38.4 million on Kraken, with two previous sell-offs in Q3 contributing to minor declines in ETH.

Source: CryptoQuant

Despite this, the overall flow of assets to exchanges has diminished, suggesting that selling pressure on centralized platforms is slowly decreasing. This may provide the opportunity for ETH to further recover.

The reduction in selling pressure occurs alongside a rise in demand for Ethereum among US investors, as indicated by the Coinbase Premium Index and the recent favorable flows into US ETH ETFs.

Nonetheless, it remains uncertain whether the ETH rebound will persist after the excitement surrounding the Fed’s rate cut has faded.