Despite the launch of a US spot ETH ETF in Q3, Ethereum [ETH] has witnessed a waning interest in the market. During Q3, ETH saw a 25% decline and reached an all-time low against Bitcoin [BTC] on the ETH/BTC pair, which measures the altcoin’s performance relative to BTC.
However, following a recent shift in the Federal Reserve’s stance, Ethereum made a comeback to surpass $2500 after a three-day rally.
This upward trend was accompanied by a total inflow of $8.2 million over the last two trading days into US spot ETH ETFs.
Is the ETH/BTC Bottom Approaching?
Despite these positive signs, cryptocurrency analyst Benjamin Cowen remains cautiously optimistic about Ethereum’s strength and the potential ETH/BTC bottom.
Cowen pointed out that the ETH/BTC bottom might remain out of reach unless the pair manages to surpass the 50-day Moving Average (MA), drawing parallels with trends observed in 2016 and 2019.
“Historically, the bottom for ETH/BTC was confirmed after reclaiming the 50-day SMA following breakdowns in 2016 and 2019…Therefore, until ETH/BTC crosses above the 50D SMA, there’s a possibility for further downside.”
However, Cowen noted that a recovery could be on the horizon if the pair bounces back above the 50-day MA, which currently stands at 0.04255.
“Once the 50-day SMA is breached, the likelihood of a bottom formation increases.”
Typically, a price movement above the 50-day MA indicates a bullish momentum in the short term.
Meanwhile, some large holders have been cashing out profits from Ethereum’s recent price surge. According to Spot On Chain, a known whale offloaded 15,000 ETH valued at $38.4 million on Kraken. This particular address had previously conducted two sell-offs in Q3, resulting in minor ETH price dips.
Despite this profit-taking, the overall net outflow from exchanges has decreased slightly following the recent spike. This reduction in selling pressure on centralized exchanges might pave the way for Ethereum’s price recovery to continue.
Simultaneously, the increased interest in Ethereum among US investors is evident from the Coinbase Premium Index and the encouraging flow of funds into US ETH ETFs.
Nonetheless, the sustainability of ETH’s recovery post the excitement surrounding the Federal Reserve’s policy adjustments remains uncertain.