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Famous crypto analyst Benjamin Cowen has voiced his concerns regarding the potential downward trajectory of Ethereum (ETH). The analyst suggested that the altcoin king might be repeating a historical pattern that could lead to significantly lower price levels.
Ethereum Faces $1,200 Warning
Speaking in a recent strategy session, Cowen highlighted similarities between Ethereum‘s current situation and past market cycles. He pointed out that Ethereum did not bottom out until it invalidated a breakout from an ascending wedge formation and then retested a macro low during the last bear market.
Cowen also emphasized the importance of Ethereum’s performance against Bitcoin, noting that a deterioration in the Ethereum/Bitcoin (ETH/BTC) ratio was followed by a drop in ETH’s value.
While the ETH/BTC ratio is currently wavering at support levels, Cowen added that a potential breakdown could trigger further declines for ETH/USD. He suggested that if this scenario unfolds, Ethereum’s price could fall to the $1,200 level, drawing significant parallels with previous market movements.
Close Watch on ETH/BTC Ratio Advised
Analyzing past data, Cowen noted that a breakdown in the ETH/BTC ratio in July 2019 preceded a significant drop in Ethereum’s USD value. He underscored the correlation between these events, adding that a similar pattern could emerge and potentially lead to a retest of previous low levels.
Cowen highlighted that Ethereum’s price drop in December 2019 occurred after a disruption in the ETH/BTC trading pair, emphasizing the importance of this metric in predicting Ethereum’s movements. As ETH/BTC is currently trading close to support levels, Cowen mentioned that a downward break in the ratio could signal further downside for Ethereum’s value against USD.
At the time of writing this article, the ETH/BTC ratio is trading at 0.05581 (equivalent to $2,927), which is above the 0.049 (equivalent to $2,570) level pointed out by Cowen. While Cowen’s analysis serves as a cautionary note for Ethereum investors, it also provides valuable insights into ETH’s future price movements, underscoring the need for close monitoring of the ETH/BTC trading pair.
