ETH/BTC trading pair highlights Bitcoin’s dominance, but will Fed tapering change trend?

On September 10, ITC Crypto founder and CEO Benjamin Cowen identified a wedge chart pattern this cycle similar to previous cycles in 2019, but several orders of magnitude larger.

He said the ETH/BTC structure bottomed out after an interest rate cut in 2019, and it appears to be mirroring that pattern now with an imminent rate cut expected next week.

The wedge that #ETH formed this cycle had higher lows that are ~10x the 2019 wedge.

In 2019, #ETH it fell back into its wedge just before the first rate cut, just like in 2024.

After the first rate cut in 2019, ETH fell below its wedge, and then #ETH / #BTC finally bottomed out. pic.twitter.com/lAcJi8TBHX

— Benjamin Cowen (@intocryptoverse) September 10, 2024

Meanwhile, MN Consultancy founder Michaël van de Poppe identified a bullish divergence that was still valid with a recent higher low on the ETH chart. This could lead to a break in the downtrend, he added.

“The downtrend of the past few months is likely to break to the upside. This could be a major push for the entire market.”

ETH prices are currently trading up 2.6% on the day at $2,345 at the time of writing. The asset fell to a low of just under $2,200 on September 7, which was only slightly higher than the August 5 dip, suggesting it bounced off strong support twice.

However, ETH has underperformed its big brother, down 46% from its 2024 peak in mid-March.

Tariff issues continue

There are several reasons why Ethereum has performed so poorly, and one is the growing concern about declining network fees and an inflationary supply issue.

It has been suggested that Coinbase’s support for EIP-4844 was the catalyst for the switch to inflationary issuance and the drop in fees. Meanwhile, the company’s Layer 2 network, Base, has seen a “parasitic” increase in users (mostly meme coin coiners) and an increase in network revenue.

The Ethereum community allows it @Coinbasea private company, to influence the development of the protocol to favor their own for-profit business.

now @Coinbase has parasitically stolen all users and ETH fees through @baseand exports it all to the community as inflation. pic.twitter.com/WB58ME9vXb

— Pledditor (@Pledditor) September 9, 2024

Good news soon?

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

More than 126,000 new wallets were created in one day, which is “indicative of the increasing utility of the network,” he claimed. It is the highest day for new Ethereum wallets since May 5th.

Additionally, ETH prices are up 7% since the weekend as analysts speculate on a possible recovery.

Ethereum just hit a four-month high in network growth, on a day (Sunday) that is traditionally the least active of the week. The 126,210 new wallets created are indicative of the increased utility of the network and the projected price rebound from the $2,200 to $2,300 level. pic.twitter.com/zQaKbBdznK

— Santiment (@santimentfeed) September 9, 2024

Santiment analysts commented on the correlation between network growth and price action, stating:

“In general, whatever the mid-term price trend, large increases in network activity are more indicative of a price reversal. Such increased network growth is rarer when prices are down” .

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