Data shows that Ethereum could suffer a correction of up to US$1,000
As with Bitcoin (BTC), the price of Ethereum (ETH) faced strong selling pressure this week, falling 10% in the last seven days. Even with a slight increase this Friday (04), the cryptocurrency remains in the US$2,300 region, far from its highs.
With the price of ETH already trading below $2,400 levels, some market analysts believe there is another 50% drop on the way. According to these models, ETH could fall to the $1,200 region.
Ethereum Regression Model Suggests Big Drop
This less-than-optimistic prediction came from famous cryptocurrency analyst Benjamin Cowen, who relied on the logarithmic regression model. According to this model brought by Cowen, whenever ETH broke support against Bitcoin, the ETH/USD pair faced a 70% drop to the lower logarithmic regression trendline.
So far, ETH has already lost 41% of its value compared to BTC. Therefore, Cowen's analysis raises market concerns. If this happens, the price of Ethereum tends to repeat its previous downward trend.
Historically, these sharp declines have occurred in the fourth quarter of 2016 and the fourth quarter of 2019. That is, the fourth quarter of 2024 would be within the timeline for declines from this level.
On the other hand, several market traders were optimistic about a potential bull rally in October, the famous “uptober“. But Cowen and other traders cautioned that it would be wise to consider downside risks as well.
In one of his X posts in August, Cowen issued a warning: “I think it (ETH) will have a big drop before the bull rally. This drop could lead to the price reaching US$1200, postponing appreciation until 2025.”
This means that Ethereum price could be preparing for another 50% correction from current levels. Some market analysts have dismissed Cowen's analysis, stating that his analysis does not apply during the year of Bitcoin, an argument that Cowen countered by saying:
“In the fourth quarter of 2016, ETH went into the regression band, which was a halving year. Honestly, the whole “But this is a halving year!” argument It's getting a little old. They could have said the same thing when ETH was at $4,000, and it still fell to $1,900,” he said.
Following investors
Earlier this week, Bitcoin and altcoins plunged amid the growing conflict between Israel and the Iranian-backed terrorist group Hezbollah. On the other hand, Ethereum ICO whales continued to sell their holdings, showing that some long-term investors are losing confidence.
Furthermore, total flows into Ethereum ETFs have remained stable as institutional investors prefer BTC over ETH in the current market uncertainties.
However, despite this, Ethereum co-founder Vitalik Buterin has been focusing on the next big steps within the ecosystem. A day earlier, Buterin proposed reducing the minimum ETH staking requirement by half, to 16 ETH, in order to encourage its use.