ETH's recovery after the Fed's turn
Last week, the Fed's policy adjustment enabled ETH to successfully recapture $2,500 and boosted the performance of ETH/BTC.
According to analyst Benjamin Cowen, if ETH/BTC can recover to the short-term trend of the 50-day moving average, a bottoming rebound may occur.
Despite the debut of the US spot ETH ETF in the third quarter, ETH still fell 25% during the period and hit a record low on the ETH/BTC pair, reflecting the weak performance of altcoins relative to Bitcoin.
However, the Fed's turn helped altcoins to recover to $2,500 after three consecutive days of gains. In addition, the US spot ETH ETF has a net inflow of $8.2 million in the last two trading days, which further supports the rise of ETH.
So, when will ETH/BTC bottom out?
Nevertheless, Cowen is cautious about the strength of ETH and the bottom of ETH/BTC. He pointed out that according to the market trends in 2016 and 2019, if ETH/BTC fails to recover above the 50-day moving average, the bottoming is still not easy to achieve.
He mentioned: "After the crashes in 2016 and 2019, ETH/BTC bottomed out when it rose back above the 50-day moving average. Therefore, as long as ETH/BTC is below the 50-day moving average, there is still downside risk."
However, if ETH/BTC rebounds and breaks through the 50-day moving average of 0.04255, there may be a chance of recovery. "Once it exceeds the 50-day moving average, I think the probability of bottoming out will increase significantly."
When it is above the 50-day moving average, it usually indicates bullish momentum in the short term.
At the same time, some whales have also begun to profit from the recent ETH price increase. According to Spot On Chain data, a whale sold 15,000 ETH worth $38.4 million on Kraken, and the address sold several times in the third quarter, each time causing ETH to fall slightly.
Nevertheless, despite the recent rise in ETH prices, the net outflow of the overall exchange is gradually decreasing. This shows that the selling pressure on centralized exchanges is easing, which may provide support for the continued rise of ETH.
The reduction in selling pressure coincides with an increase in demand for Ethereum from U.S. investors, as reflected in the Coinbase Premium Index and recent U.S. ETH ETF inflows.
However, as the euphoria associated with the Fed’s rate cuts fades, it remains to be seen whether Ethereum’s recovery can be sustained.
