Benjamin Cowen analyzes Ethereum’s price action and its correlation with macroeconomic trends, warning that ETH may face more downside before a true recovery.
1. Ethereum’s Repeated Capitulations
Key Highlights:
- Ethereum has repeatedly seen sharp sell-offs following Japan’s interest rate hikes.
- This pattern has played out multiple times in the past year.
- ETH may see another drop before forming a sustainable bottom.
2. ETH Price Action: Capitulation, Bounce, Then Another Drop?
Key Highlights:
- Historical patterns suggest that after a sharp capitulation, ETH bounces before another leg down.
- ETH’s price structure shows a weak recovery and could revisit previous lows.
3. Japan’s Interest Rate Hikes Could Be a Key Catalyst
Key Highlights:
- The Bank of Japan (BoJ) is expected to raise rates again in July, but it could happen sooner.
- Rising Japanese bond yields indicate mounting pressure for further rate hikes.
- Another BoJ rate hike could lead to another ETH sell-off, as seen in previous cycles.
4. ETH vs. Bitcoin: The Struggle Continues
Key Highlights:
- ETH/BTC has been in a prolonged downtrend, failing to gain meaningful strength.
- Ethereum needs a shift in monetary policy (e.g., end of quantitative tightening) for ETH/BTC to recover.
- Until then, Bitcoin remains the stronger asset.
5. Post-Election Year Seasonality: A Market Clue?
Key Highlights:
- March historically tends to be a weak month for stocks, which could impact ETH.
- If equities recover in April, ETH may follow suit.
- However, ETH/BTC performance remains a key concern.
6. ETH Needs a Macro Pivot to Rally
Key Highlights:
- The Federal Reserve has hinted at ending quantitative tightening in mid-2025.
- Historically, ETH/BTC has only bottomed after the Fed shifts to a looser monetary policy.
- Until that happens, ETH remains vulnerable to further downside.
🔥 Final Take: Ethereum’s price action remains weak, and ETH/BTC has yet to show a convincing bottom. Until macroeconomic conditions shift, ETH is likely to continue struggling. If Bitcoin rallies, ETH will rise—but still underperform BTC. The true ETH breakout may not happen until the Fed ends quantitative tightening.
