Benjamin Cowen takes a close look at Ethereum’s recent price drop and its relationship with Bitcoin. He explores whether ETH has finally hit a major support level or if it still has room to fall.

Ethereum’s Recent Drop – Is It Following a Pattern?

Ethereum has now dropped to a key support level that Cowen has long called “home.” He believes ETH has followed a predictable pattern, falling after the Bank of Japan raises interest rates.

Key Highlights:

  • Every time Japan raised rates in this cycle, ETH dropped the next month.

  • The latest rate hike in January led to another drop in February, continuing the trend.

  • This is the first time in this cycle that ETH has reached this low support level. The big question: Is this the bottom, or could ETH fall even further?

Ethereum vs. Bitcoin – Which One is Stronger?

Cowen stresses that Ethereum’s value compared to Bitcoin (ETH/BTC) is a key factor to watch.

Key Highlights:

  • ETH/BTC has dropped below 0.03, which Cowen predicted months ago.

  • ETH has been losing value against Bitcoin, even with bullish stories like:

    Key Highlights:

    • The move to Proof-of-Stake

    • The idea that ETH is becoming deflationary (fewer ETH in circulation)

    • Speculation about an Ethereum ETF

  • But Cowen argues that macro factors (big-picture economics) are more important than these narratives.

  • Historically, ETH/BTC only reverses its downtrend when the Federal Reserve stops tightening monetary policy (QT ends).

  • Until QT ends, Cowen doesn’t see a strong reason for ETH to start gaining value against Bitcoin. However, at these lower levels, ETH is becoming more attractive for long-term investors.

Looking at Past Cycles – What History Tells Us

Cowen compares today’s ETH market to past cycles and finds two interesting patterns.

Key Highlights:

  • 2016 Comparison:

    Key Highlights:

    • ETH had a triple top pattern (three peaks before dropping).

    • After a sharp drop, ETH bounced back and hit new all-time highs.

    • If ETH follows this path, the next time it reaches $4,000, it could break past it.

  • 2019 Comparison:

    Key Highlights:

    • ETH followed a higher low structure before breaking down.

    • ETH/BTC bottomed out right after that breakdown.

    • If history repeats, ETH/BTC might be very close to its lowest point for this cycle.

What happens next depends on Bitcoin:

Key Highlights:

  • If Bitcoin keeps rising, ETH will likely go up too, but it will still lag behind Bitcoin.

  • If Bitcoin falls, ETH could drop further before finding a solid bottom.

Ethereum’s Supply – Why It Matters

Cowen has long said that when ETH’s total supply returns to pre-Merge levels, it could signal a big turning point for ETH/BTC.

Key Highlights:

  • That moment has now arrived—ETH’s supply is back to where it was in 2022.

  • At the same time, ETH/BTC has dropped to its lowest level in years.

  • This could mean ETH/BTC is finally near a major turning point, but it depends on larger market conditions.

Final Thoughts – What’s Next for Ethereum?

Key Highlights:

  • ETH has finally reached its key support zone. This might mean the bottom is in, but it could still go lower.

  • If Bitcoin drops, ETH will likely fall even further.

  • The biggest factor is the Federal Reserve. Until they stop tightening monetary policy (QT), ETH may keep struggling against Bitcoin.

  • For long-term investors, ETH is looking more attractive at these levels, but patience is key.

  • Cowen’s bottom line: Ethereum is at an important level, but its next big move will depend on what happens with Bitcoin and the Federal Reserve.

Ivan On Tech – BITCOIN: RALLY EXHAUSTED AND WAS DEAD CAT BOUNCE!!!!? (05.02.2025 Summary)
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Ivan On Tech – BITCOIN: RALLY EXHAUSTED AND WAS DEAD CAT BOUNCE!!!!? (05.02.2025 Summary)