Popular cryptocurrency analyst Benjamin Cowen has issued a warning regarding the potential bearish turn of Ethereum (ETH) in the final quarter of the year. With a significant social media following of 861,500 on X, Cowen suggests that ETH may be mirroring a pattern from 2016 on the monthly timeframe, indicating a possible downturn in the fourth quarter. However, he also mentions that if ETH continues to follow this pattern, it could potentially experience substantial gains in the first half of the following year.
At the time of writing, Ethereum is trading at $2,375, reflecting a 3.3% decline in the past 24 hours. Cowen further speculates that for Bitcoin (BTC) to initiate a rally, Tether Dominance (USDT.D) would need to break below a trend line on the weekly timeframe. This would signify that market participants are utilizing stablecoins to accumulate crypto assets, historically correlating with Bitcoin uptrends. Cowen emphasizes the importance of monitoring the declining percentage of Tether’s market cap relative to other cryptocurrencies as an indicator for potential Bitcoin price movements.
Additionally, Cowen shares a chart of the logarithmic regression band of the cryptocurrency market cap, designed to track the fair value of the asset class using non-bubble data. Based on historical trends, Cowen suggests that the crypto market may not surpass fair value and enter the overvalued territory until early next year. He highlights previous cycles where the market did not overvalue until specific quarters, indicating that a potential delay in reaching overvalued territory would align with past market behavior.
Overall, Cowen’s insights provide valuable perspectives on the potential future movements of Ethereum, Bitcoin, and the broader cryptocurrency market. By analyzing historical patterns and market dynamics, investors can gain a better understanding of the possible trajectory of digital assets in the coming months. As the crypto market continues to evolve, staying informed and adapting to changing trends will be crucial for navigating the volatile landscape of cryptocurrencies.