Benjamin Cowen provides an in-depth analysis of Ethereum’s market cycle, arguing that ETH’s price action follows historical patterns. He believes Ethereum’s weakness against Bitcoin is the real issue, and its recovery depends on broader macroeconomic shifts, particularly the Federal Reserve’s monetary policy.
Ethereum’s Price Action Follows Past Cycles
Key Highlights:
- Ethereum is repeating a pattern from previous market cycles, particularly 2019.
- ETH has formed a wedge pattern over time, creating an illusion of stability, but historically, these patterns have broken down before a real bottom is found.
- The last time ETH followed this pattern, it experienced a final leg down before recovering. Cowen believes this could happen again.
ETH’s Bitcoin Valuation Matters More Than Its USD Price
Key Highlights:
- Many investors focus on Ethereum’s USD price, but Cowen argues that ETH’s strength should be measured against Bitcoin (ETH/BTC).
- ETH is still in a prolonged downtrend against Bitcoin, meaning holding ETH over BTC has been a losing trade for years.
- Until ETH/BTC finds a clear bottom, ETH remains a weaker investment than Bitcoin.
Ethereum’s Struggles Are Tied to Monetary Policy
Key Highlights:
- Cowen believes ETH’s weakness is closely linked to quantitative tightening (QT), the Federal Reserve’s effort to reduce liquidity in financial markets.
- ETH/BTC tends to bottom out when the Fed ends QT, as seen in previous cycles.
- If the Fed pivots away from QT in mid-to-late 2025, Ethereum could finally find its bottom and start recovering.
ETH Could Drop Further Before Rebounding
Key Highlights:
- Cowen warns that ETH may continue bleeding against Bitcoin for a while longer.
- Even if ETH/BTC bottoms, ETH/USD can still decline if Bitcoin also drops.
- Investors should be patient, as Ethereum’s real recovery might not start until the macroeconomic picture improves.
🔥 Final Take: Ethereum’s long-term future remains strong, but right now, it is underperforming Bitcoin and has yet to form a proper bottom. Cowen advises caution, as Ethereum is still likely to follow past cycles and face more downside before a recovery. The key signal for Ethereum’s turnaround will be the end of quantitative tightening, which could take several more months. Until then, Bitcoin remains the dominant asset in the market.
