The crypto market has been experiencing significant turbulence lately, prompting Benjamin Cowen, the founder and CEO of Into The Cryptoverse, to share his insights on the recent downtrend observed in the Ethereum/Bitcoin (ETH/BTC) pair. Cowen’s analysis delves into the intricate relationship between the pricing of Ethereum and Bitcoin, shedding light on the potential for further downside risk.
According to Cowen, the ETH/BTC pair is currently on a downward trajectory, with historical data indicating that whenever the pair declined in the past, ETHUSD witnessed a sharp drop of approximately 70%. While the crypto community has been eagerly anticipating an Altcoin season for the past 2.5 years, Cowen emphasizes the importance of warning the community about the possibility of a continued downward movement.
Cowen points out that ETH/BTC is currently being rejected by the bull market support band, which he had previously predicted following a price pump. He anticipates that the pair will likely be rejected by the bull market support band, particularly when looking at weekly closes ($0.053-$0.054). The recent price pump seems to mirror the pattern of previous cycles, suggesting a potential summer capitulation.
Following the launch of Bitcoin Spot Exchange-Traded Funds (ETFs), Cowen notes that ETH/BTC experienced a significant rally. However, he cautions that this rally may be reminiscent of the trend observed in the previous bull cycle, which ultimately led to new lows. Despite the rally, Cowen observes an undeniable macro downtrend since November 2021, especially following the merger of the ETH/BTC pair.
Investors have been holding onto ETH instead of BTC during the downtrend from 0.085 to 0.048 due to multiple lower highs, creating an illusion of stability. Cowen had predicted that the bull market support band would reject ETH/BTC, particularly considering weekly closes ($0.053-$0.054), following the Bitcoin Halving. He remains confident that ETH/BTC will reach between $0.03 and $0.04 by the summer, regardless of market movements.
Performance Divergence Between Ethereum and Bitcoin
As the two leading cryptocurrency assets, Ethereum and Bitcoin continue to garner significant interest. However, on-chain analytics firm Glassnode has indicated a shift in performance between the two digital assets. The firm highlights an increasing divergence in performance between Ethereum and Bitcoin in the 2023–2024 cycle, attributed to weaker trends in capital rotation and ETH price performance compared to previous cycles and all-time highs.
Cowen’s insights provide a nuanced understanding of the current state of the ETH/BTC pair, emphasizing the importance of caution and thorough analysis in navigating the volatile crypto market landscape. As always, it is crucial for investors to conduct their own research and assess the risks associated with any investment decisions.