Benjamin Cowen has been tracking the Ethereum to Bitcoin (ETH/BTC) ratio for a long time, as he believes it provides important insights into the crypto market cycle.
The ETH/BTC ratio is the price of Ethereum measured in terms of Bitcoin. It’s an important metric that crypto analysts like Benjamin Cowen use to understand the relative performance of Ethereum compared to Bitcoin.
Tracking the movements in the ETH/BTC ratio can provide valuable insights into market trends and cycles.
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Benjamin has been cautious on Ethereum relative to Bitcoin for the past 2.5 years, as the ETH/BTC ratio has seen a prolonged decline, despite Ethereum’s price in US dollars (ETH/USD) reaching new highs.
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Cowen argues that the recent breakdown in the ETH/BTC ratio is a major event that signals trouble ahead for Ethereum’s USD valuation. He points to past instances where a collapse in ETH/BTC led to substantial drops in ETH/USD, around 60-75% on average.
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Cowen believes Ethereum is likely headed back toward the lower support levels, which could take it down to around $2,000. He thinks this process will play out over the next few months, as the Federal Reserve continues to tighten monetary policy.
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Cowen remains more favorable on Bitcoin compared to Ethereum during this phase, as he believes Bitcoin is better positioned to withstand the impact of quantitative tightening. He cautions that the altcoin market, including Ethereum, could face a severe reckoning if the ETH/BTC breakdown persists.
Overall, Cowen’s analysis suggests a cautious outlook for Ethereum in the near-term, with the potential for significant downside based on the technical patterns in the ETH/BTC pair. He encourages investors to closely monitor the situation as it unfolds.
