While Ethereum has been in a bear market for the past 30 days, there are chances that it will soon bottom out. One well-known crypto analyst has voiced concern over Ethereum’s (ETH) performance compared to Bitcoin’s (BTC), speculating that a major event could cause a large drop.
What’s behind this bearish outlook, and what should altcoin investors be doing right now? Let’s dive in.
Expect a 50% Drop, If This Happens. Says Cowen
While the majority of altcoins are projected to plunge by 40-50% against Bitcoin, ETH is no exception. During an exclusive interview with Ran Neuner of Crypto Banter, Benjamin Cowen brought up the possibility of a drop of more than 50% in the ETH/BTC pair from its present value of 0.063 BTC (roughly $1,828). But why is this dark projection being made?
This perspective came as he believes there is a bearish double-top pattern forming on the monthly chart for the ETH/BTC pair. To be noted, this pattern indicates that holders of Ethereum may be capitalizing on rallies to exchange their ETH holdings for BTC.
For him this is not just a trend, Cowen said, it appears that the current phase in the ETH/BTC market is really a big distribution period, similar to the one we have seen in the previous cycle, in which there was an initial pump, followed by a sell-off, and then a distribution phase. We believe that the ETH/BTC pair is at a critical juncture, where a break to the negative is likely.
Historical Patterns Are Also Bleak, What’s the Catalyst?
He correlated his stance with historical patterns. His analysis suggests historical trends, that the ETH/BTC pair typically experiences declines during the months of June through December. While there will be a potential drop to as low as 0.03 BTC (equivalent to $871), reflecting a decrease of over 52% from its current value.
His forecast also included the further possibility of a stock market retracement acting as the catalyst for this significant decline. Cowen recalled a similar scenario in late 2017, where the Ether/Bitcoin pair experienced a drop.
However, it was a subsequent drop in 2018 that marked the end of a period of reckoning for various altcoins. However, based on this data, Cowen predicted that a similar trend may arise once again, this time possibly led by a seasonal decline in the S&P 500.
Having said that, those who have put a lot of money into altcoins will face a genuine and pressing problem if the predicted loss of 40-50% occurs before any rebound.
In conclusion, Cowen’s analysis highlights the potential for a substantial decline in Ethereum’s value compared to Bitcoin, with a specific focus on the ETH/BTC pair. However, it’s important to note that the cryptocurrency market is highly volatile and subject to various factors that can influence price movements.