Cryptocurrency enthusiasts are closely monitoring the market as price fluctuations continue. Amidst these speculations, a renowned analyst has issued a stark warning about Ethereum (ETH), suggesting a potential significant drop in its value.
Why Could Ethereum Fall?
Cryptocurrency analyst Benjamin Cowen has warned of a possible substantial decline in Ethereum’s price. In a recent YouTube analysis, Cowen pointed out that Ethereum has dipped below the Market Support Band (BMSB), a key indicator comprising the 20-week simple moving average and the 20-week exponential moving average. This indicator is crucial for determining an asset’s trend direction.
Cowen highlighted that the last time Ethereum fell below this support band was approximately 30 weeks ago. He noted that the current situation mirrors past occurrences when Ethereum’s price dropped significantly after closing below the BMSB.
What Happens If History Repeats?
Based on previous trends, Cowen anticipates that Ethereum could see a 50% drop from its recent prices. He recalled similar instances where Ethereum/USD plummeted by about half after falling below the BMSB, suggesting ETH could potentially fall to around $1,400 from its previous high of approximately $2,970.
Such predictions have stirred considerable concern among investors, particularly during these uncertain times in the market. As Ethereum hovers below key support levels, the market remains on edge.
Key Takeaways for Investors
Investors can infer several critical points from Cowen’s analysis:
- Monitoring the BMSB is crucial for predicting potential price movements.
- Historical trends suggest significant price drops after falling below this support level.
- Current market conditions warrant caution and close observation of ETH price action.
Early today, Ethereum briefly climbed above $3,000 but has since retreated to around $2,950. Concurrently, its market cap has dropped to approximately $350 billion, with a 24-hour trading volume reaching $14 billion after a 5% increase, making it the third most traded coin.
Cowen also mentioned that while he expects the Ethereum/Bitcoin (ETH/BTC) pair to find a bottom soon, the ETH/USD pair might take longer to stabilize. As the market watches closely, investors remain cautious about the potential downturn.