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Benjamin Cowen Warns Of Ethereum Price Downside Potential — Is ETH Headed Below $2,800?

Last Updated May 9, 2024 2:43 PM
Nikola Lazic
Last Updated May 9, 2024 2:43 PM
By Nikola Lazic
Verified by Peter Henn

Key Takeaways

  • Benjamin Cowen points at a ETH/BTC horizontal support breakout
  • On two previous occasions this breakout occurred, a 70% price drop followed
  • $2,800 level is it pivot point below which more downside would be seen

In a recent  YouTube video, analyst Benjamin Cowen expressed his views on the cryptocurrency market. One thing that stood out was his stance on Ethereum’s price outlook and ETH’s ties with traditional markets. 

Ethereum’s price has been in a downtrend from March 12, when it peaked at $4,100. It has, at times, dropped below $3,000. As it struggles around $3,000 and is in a descending triangle, a downfall below $2,800 could mean spark an even larger drop. 

Benjamin’s Outlook 

Fundamentally speaking, Cowen sees two major catalysts for the ETH price drop. Namely, ETH ETF rejection and the US monetary policy. He said:

“…I think the impact that people are going to feel is just from tighter monetary policy. They’re going to blame it on the spot ETF and they’re going to capitulate potentially into that.”

However, the significant price drop is hinted by the price chart. Benjamin points to a horizontal support breakout on the ETHBTC pair and the drop in ETH price when it did on two previous occasions. Both on October 2016 and September 2019 when this horizontal support on the ETHBTC pair was seen, the price of Ethereum fell by 70%. 

ETHBTC/ETHUSD | Credit: Benjamin Cowen

This type of breakout happened on March 11 this year, which, if history repeats itself, is at least a sign of caution. 

Ethereum (ETH) Price Analysis 

After reaching its yearly high of $4,100 on March 12, Ethereum saw signs of weakness, forming a descending triangle. There is still a chance this descending triangle is a corrective pattern with ABCDE waves counted. This hints at the potential start of the next bull phase when it ends. 

ETH/USD | Credit: Nikola Lazic/Tradingview

However, there is a bearish scenario in which ETH is now heading to its ascending support of $2,800. If it does, we could see a breakout to the downside.

As the price of Ethereum approaches the triangle’s apex, we will soon see the breakout direction, which will dictate the future outlook. If the price is in its corrective stage, the rise from May 1 is the starting uptrend in which case it cannot go below its starting point of $2,800. 

But if it does, it would indicate Ethereum hasn’t been in an ABCDE correction. Therefore, entering the lower range would mean ETH could face more downside with its next target being at the $2,100 area. 

Disclaimers

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

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