Market analyst Benjamin Cowen has provided insights into Ethereum’s cyclical breakdown patterns, pointing to similarities in 2016 and 2019 that could repeat in Q4 2024.
Cowen recently shared charts showing Ethereum’s ETH/USD monthly candles exhibiting comparable behavior, particularly with a breakdown against Bitcoin (ETH/BTC) occurring for the third time in circumstances akin to those of 2016 and 2019.
The question that looms large now is whether ETH/USD will continue to descend to align with historical patterns.
In examining historical ETH/BTC breakdowns, Cowen’s analysis indicates that in Q4 2016, Ethereum witnessed its first major ETH/BTC breakdown, followed by a subsequent drop in ETH/USD over the ensuing months. This coincided with Ethereum breaching a green regression curve, which then served as robust support. Despite the Q4 decline and break below the regression curve, Ethereum saw a resurgence in upward movement in the subsequent months.
Similarly, in Q4 2019, Ethereum experienced another ETH/BTC breakdown. While October 2019 showed a slight recovery with a green candle, the cryptocurrency faced red months in November and December, hinting at further downside. This trend mirrored Ethereum’s movement below the regression curve, followed by a recovery in the subsequent months, particularly in the first quarter of 2020.
Looking forward, the analysis suggests that Ethereum may have already undergone the historical ETH/BTC breakdown, signaling a potential slump if ETH/USD continues to drop. The current alignment with the logarithmic regression band could indicate an impending decline akin to that seen in 2016 and 2019, with a subsequent rebound likely in the following months.
Moreover, recent reports of large Ethereum transfers to exchanges add to the bearish sentiment. Notably, a whale from Ethereum’s ICO background has been actively moving significant amounts of ETH, including a recent transfer of 5,000 ETH valued at $12.22 million to Kraken. This is part of a larger trend, with the whale offloading 45,000 ETH over the past two weeks at an average price of $2,516, totaling 60,000 ETH for $149.68 million to date.
In a separate development, the Ethereum Foundation executed transfers of 2,500 ETH ($6.06 million) to the Bitstamp exchange in two transactions, sparking speculation of potential further sales as Ethereum grapples with downward pressure in Q4 2024.
