The largest cryptocurrency, Ethereum, experienced a slight rebound earlier this week, climbing by 2% to around $2,300 at the time of writing. This comes after last week’s 5% drop, pushing the price to $2,100. However, crypto analyst Benjamin Cowen warned that Ethereum could dip below $1,500, drawing parallels to a similar trend in 2019.
The markets expect the Fed to announce its first rate cut at next week’s FOMC (Federal Open Market Committee) meeting. In 2019, after a similar rate cut, Ethereum (ETH) dropped below its key support level, leading to a bottom in the ETH/BTC ratio. This ratio compares the value of Ethereum to Bitcoin and has recently fallen to a yearly low of 0.40.
Analyst Cowen suggests that if the 2019 pattern repeats, the ETH/BTC ratio could decrease when ETH hits $1200 by Dec. 2024, with a rebound expected in the first half of 2025. Currently, the ETH/BTC ratio is struggling to stay within the lower end of its two-year range.
From the crypto hedge fund Lekker Capital, Quinn Thompson recently shared a similar view. He believes the ETH/BTC ratio could fall to 0.033 by year’s end before bouncing back, suggesting that ETH is currently overpriced.
ETH outflows continue as BTC ETFs thrive
According to data from Farside Investors, since the products started trading in July, they’ve seen a total outflow of $574 million. In fact, there were days over the past two weeks when no money flowed in at all. Meanwhile, U.S. spot Bitcoin ETFs have earned $16.9 billion since their launch, with even stronger performance in the first two months.
Despite a brief rally this week, most Ethereum (ETH) traders remained pessimistic. The Taker Buyer Sell Ratio showed a higher volume of sell orders than buys, signaling that bearish sentiment still dominated the derivatives market. In the near future, the important price points to keep an eye on are around $2.3K, $2.4K, and $2.5K, which align with the 50-day Exponential Moving Average (EMA).
