- The price performance of Ethereum shows parallel movement with Bitcoin since altcoin typically rebounds during Bitcoin’s post-halving growth phases.
- According to Cowen the Bitcoin dominance level should reach 66% by the end of quantitative tightening in May or July thus creating more pressure on alternative cryptocurrencies.
- Historical data shows Ethereum and other altcoins decline before the Fed ends quantitative tightening, followed by brief altcoin price surges.
In a recent interview, analyst Benjamin Cowen offered a detailed breakdown of Ethereum’s market behavior in relation to broader macroeconomic factors and Bitcoin control dynamics. His comments come at a time when investors are closely watching altcoins for signs of movement in the wake of Bitcoin’s halving and speculation around U.S. monetary policy.
Ethereum Mirrors Bitcoin: Cycles and Declining ETH/BTC Ratio
According to Cowen Ethereum exhibits similar market movements to Bitcoin throughout market cycle periods. The previous post-halving years of 2016 and 2019 followed a specific pattern according to Cowen that involved Ethereum rallying after Bitcoin started its recovery process. The current cycle shows similar patterns to previous ones because Ethereum has started gaining speed after the halving event occurred.
Ethereum demonstrates declining value in relation to Bitcoin as the market demonstrates bullish trends according to Cowen. During 2018-2019 and in recent times both periods displayed parallel trends with the ETH/BTC exchange rate rapidly dropping. Bitcoin controls market share to the extent that its price strength overrules other alternative digital currencies such as Ethereum.
Fed’s Tightening to Impact Ethereum and Altcoins
Cowen also emphasized the importance of monetary policy, particularly the Federal Reserve’s ongoing quantitative tightening (QT). According to Cowen the recent Ethereum price drop corresponds with historical market patterns that showed large price movements after Bitcoin structural modifications.Historical data shows that Ethereum has experienced drawdowns between 40% and 60% during such periods.
Ben predicts that the Fed will likely end quantitative tightening between May and July, which could lead to Bitcoin dominance increasing to 66%. He suggests that the altcoin market will experience further pain against Bitcoin before this happens, with alt Bitcoin pairs possibly dropping another 20-25%.
As of now, Bitcoin is priced around $77,430.86 with a decline of 1.9%, and Ethereum is at about $1,479.41 with a 5.7% decline. Ben compares this to previous cycles, where altcoins bottomed when the Fed ended quantitative tightening, and speculates that a brief alt season may follow, similar to the 2016-2017 cycle.
Ethereum Mirrors S&P 500, Bitcoin Dominance to Impact Altcoins
He compared Ethereum’s current market behavior to the S&P 500’s past patterns, noting similarities in formations that preceded downturns. He mentioned that current indicators, such as the Atlanta Fed’s projection of a negative GDP for Q1, suggest the market may already be pricing in recessionary conditions. This, he noted, could be placing Ethereum near a potential market bottom.
Cowen concluded by forecasting that Bitcoin dominance may rise to 66%, further pressuring altcoins before any recovery. He suggested that a modest altcoin rebound could follow later in the cycle, mirroring trends seen in previous years.
