Popular crypto analyst Benjamin Cowen believes the long-awaited “altcoin reckoning” will likely only conclude once the Ethereum/Bitcoin ratio collapses.
Speaking to his 700k Twitter followers this Sunday, Cowen noted that the ETH/BTC ratio has been putting in lower highs and lower lows ever since the Ethereum merge event in September. This price action indicates bearish momentum for Ethereum against Bitcoin.
“The altcoin reckoning will likely only be over after the collapse of the #ETH / #BTC ratio occurs. I know people are hopeful that this won’t play out, but the ratio has been putting in lower highs and lower lows since the merge,” tweeted Cowen.
In addition, Cowen pointed out that Ethereum’s dominance has continued its descent. As ETH dominance declines, Bitcoin’s dominance rises. This dynamic points to funds rotating out of altcoins and into BTC.
At the weekly close, Bitcoin and Ethereum were trading around $27.1k and $1560 respectively after losing 2.7% and 4.5% over the last 7 days. The ETH/BTC ratio currently sits just below 0.06.
Cowen’s analysis indicates that the multi-month correction in altcoins may persist until Ethereum loses significant ground compared to Bitcoin. Since altcoins tend to follow Ethereum’s price movements, an ETH/BTC breakdown could precede the final capitulation leg for the broader altcoin market.
Investors anxiously await the climax of this painful correction period. Cowen’s metrics suggest the road may remain bumpy in the near-term as the market searches for a definitive bottom. Once the ETH/BTC ratio bottoms out, traders can potentially look for renewed accumulation opportunities across altcoins.
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