Benjamin Cowen, a well-known analyst in the cryptocurrency market, evaluated the current state of Ethereum (ETH) and the possible scenarios it could follow for the remainder of the year in his new analysis video.
Cowen, noting historical cycles and macroeconomic data for Ethereum, which is trading around $1,900, warned investors that a new “window of weakness” could open in August and September following the temporary relief seen in July.
Cowen noted that, given the “midterm election years” in the US political and economic cycles, July has historically been a positive month for cryptocurrency markets.
However, looking at data from previous years, he pointed out that these increases in July were followed by sharp corrections in August and September.
“July has historically been a good month for crypto. However, looking at years like 2018 and 2022, we see that the rallies in July, following the declines in May and June, were reversed in August and September.”
Analysts comparing Ethereum’s past performance argued that the market is facing two different scenarios:
While Bitcoin is in a sideways/support-seeking phase, Ethereum and altcoins have completely lost support and fallen to their lowest levels (with drops of up to 80%).
Ethereum has proven more resilient than Bitcoin, forming a “higher low”.
Cowen stated that he doesn’t expect the current situation to bring about a catastrophic 80% drop, but a correction slightly deeper than in 2022 is possible due to social apathy and low participation. He predicted that in a potential pullback, Ethereum could experience a correction of around 40% from the approximately $1,800-$2,000 range, potentially refreshing its lows.
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Cowen noted that the rate of social engagement in the market is quite low, stating that investor interest is close to 2018 levels (social risk score 0.25). He added that the expectation of a possible interest rate hike towards the fall (September-October), or the fear it creates, could trigger one last wave of selling in altcoins, which are risky assets.
Benjamin Cowen argued that the real critical test for Ethereum will occur between August and October. He stated that if Ethereum still holds the $1,800 level in September or October, confidence in the market will increase, but caution is advised until then. He added that a sustained bull momentum could be delayed until next year.
*This is not investment advice.
