Cryptocurrency analyst Benjamin Cowen recently shared his perspective on the future trajectory of Ethereum (ETH) and Bitcoin (BTC). While he does not foresee a drastic decline in prices, Cowen suggests that there might be room for further downturns before a potential market recovery. Here’s an in-depth analysis of his insights:
ETH/BTC: Approaching a Potential Bottom
Cowen highlights the possibility that the ETH/BTC pair is nearing its bottom. This observation is based on historical trends where Ethereum has showcased significant rallies post reaching a low. For instance, in 2019, Ethereum witnessed a 33% surge after bottoming out against Bitcoin.
Current Market Dynamics: Ethereum is already showing a 26-27% increase from its recent lows against Bitcoin. Cowen points out that if the ETH/BTC pair manages to stay above its 50-day moving average, there could be more upward potential.
Key Resistance Levels: The next resistance for ETH/BTC is identified around the 0.042–0.043 mark, which corresponds to the Bull Market Support Band. Breaking through this level could indicate further bullish trends for Ethereum.
Bitcoin Dominance: Implications for Ethereum
Bitcoin’s market dominance typically sees an uptick towards the end of the Bitcoin halving year, particularly in the fourth quarter. However, this year has shown unpredictable fluctuations in dominance.
Outlook for Bitcoin Dominance in 2024: Despite the usual pattern of increased dominance in Q4, the current year has been more volatile. Cowen suggests that a rise in Bitcoin dominance could lead to a sell-off in various altcoins, including Ethereum.
ETH/BTC Price Stability: Even if other Bitcoin pairs experience a decline, Cowen believes ETH/BTC might remain stable or not drop significantly further.
The Influence of Bitcoin on Ethereum’s Price Movements
The analyst underscores the significant influence Bitcoin’s price movements have on Ethereum’s performance. A drop in Bitcoin’s price below the critical $70k level could indicate market weakness, potentially affecting Ethereum as well.
Support Levels for ETH/USD: Should Bitcoin’s price fall below $70k, Ethereum might face additional downside risks. However, Cowen advises maintaining a cyclical perspective based on historical trends, as long as Bitcoin stays above this crucial level.
Are We Nearing the ETH/BTC Bottom?
Cowen speculates that the ETH/BTC pair might be approaching its bottom, especially as Bitcoin dominance reaches 60%. Nevertheless, he cautions that market certainty is elusive, and prices could potentially drop further.
Possibility of a Lower Low: Although Cowen considers the current levels as a potential bottom, he remains prudent, acknowledging the chance of ETH/BTC dipping before a genuine recovery occurs.
Future Outlook: As of now, Cowen identifies $0.03465 as a potential bottom level for the ETH/BTC pair. He anticipates potential confirmation of this bottom by the end of 2024.
