Ethereum Below $3,000: What Does Technical Analysis Say?

Ethereum‘s ETH/USD underperformance has sparked fresh debate about its future, with crypto analyst Benjamin Cowen suggesting the cryptocurrency might have finally reached its lower logarithmic regression trend line.

What Happened: In a video podcast on Feb. 5, Cowen, known for his data-driven approach, pointed out that Ethereum has reached a critical juncture.

"Technically speaking, ETH has gone to the lower logarithmic regression trend line,” Cowen states, emphasizing the significance of this move.

Cowen also pointed to the impact of the Federal Reserve’s monetary policy on Ethereum’s price action.

He speculates that for Ethereum to see a clear bottom against Bitcoin, further downside could be needed—potentially triggering the Fed to end its quantitative tightening policy.

While Cowen maintains a cautious outlook, he believes Bitcoin's BTC/USD performance is crucial for Ethereum’s short-term movement, saying, "The only way ETH drops below $2,000 in the short term is if Bitcoin gets a big drop."

Also Read: Ethereum Down 10% In Seven Days: Expect ‘A Lot More Volatility,’ Traders Say

Why It Matters: In addition to technical patterns, Cowen highlights that Ethereum's supply has recently returned to its pre-merge levels, which coincides with what he describes as "outright capitulation" in the ETH/BTC pair.

This could suggest a potential turning point for Ethereum.

Cowen draws comparisons to past market cycles, specifically 2016 and 2019, noting that initial moves into the lower regression band often act as "wicks," with deeper corrections following over the coming weeks or months.

As the market faces these challenges, Cowen's analysis offers a nuanced take on Ethereum's potential direction, considering both technical indicators and broader market conditions.

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