Before Federal Reserve Chair Jerome Powell announced a 25 basis point (bps) interest rate cut, Ethereum (ETH) holders were optimistic that the event would fuel a rally toward $4,500. However, the rate cut did not yield the anticipated bullish outcome, with ETH experiencing a 4.50% decline shortly afterward.

This drop has diminished hopes for a notable breakout, raising questions about what could be next for Ethereum.

Ethereum Changes It Reaction Compared to Last Rate Cut

Some months back, the Fed cut interest rates by 50 bps. This development drove a notable rally in crypto prices, including Ethereum. At that time, the sentiment leaned toward expectations of a similar rate cut before the year ended. However, this did not materialize.

Following yesterday’s decision, ETH’s price dropped from $3,890 to $3,624. While the cryptocurrency has recovered slightly, several on-chain indicators reveal that the attempted rebound could be a fakeout.

One of the indicators suggesting such is the price-Daily Active Addresses (DAA) divergence. The price DAA divergence checks if the user participation is growing alongside the price. When it is positive, it means engagement with the cryptocurrency has increased and is bullish for thhe price.

On the flip side, a negative rating indicates fewer interactions, which is bearish. According to Santiment, Ethereum’s price DAA divergence has declined to -98.28%, indicating lower user participation. Should this trend continue, ETH’s price could face a steeper price decrease.

In addition to the metric above, the Coinbase Premium Gap is another indicator that supports a further ETH decline. This metric measures the price difference between the Coinbase ETH/USD pair and the same p

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Author: Victor Olanrewaju