Although the Ethereum (ETH) price has bounced back above $2,350 levels, market analysts believe that ETH is not completely out of the woods. Historical chart patterns for the ETH price show that the upcoming Fed rate cuts could be a nightmare for the altcoins.
Ethereum Price Can Drop to $1,200 Following Fed Rate Cuts
Crypto analyst Benjamin Cowen recently stated that the current wedge pattern of the Ethereum (ETH) price is very similar compared to the lows of the 2019 wedge. Back in 2019, ETH fell back to its wedge before the first rate cut, resembling a similar pattern to the present cycle in 2024.
Following the first rate cut in 2019, ETH dropped below its wedge, and ETH/BTC eventually reached a bottom. Cowen predicts that ETH could drop to $1,200 by December, based on historical patterns. The ETH/BTC pair broke down in 2016 and 2019, leading to a 70% decline in ETH/USD to a risk level of 0.300.
Taking the current risk levels into consideration, this shows the Ethereum price drop to continue to the $1,208 level. Cowen anticipates a potential soft landing for ETH, with a possible rebound in the first half of 2025. Cowen cautions investors that they should take their own decisions and that he could be wrong too.
Top Institutions Continue Selling ETH
The Ethereum whale activity has shot up recently with top players like the Ethereum Foundation and Vitalik Buterinreducing their ETH holdings in the past few weeks.
Furthermore, as per the recent on-chain data Hong Kong-based asset manager Metalpha has sold nearly 40% of its ETH holdings in the past four days. Earlier today, the Bitmain-affiliated asset manager sold 10,000 ETH worth $23.5 million. In the last four days, Metalpha has sent a total of 33,589 ETH, worth around $77.55 million, to crypto exchange Binance, as shared by blockchain analytics firm Lookonchain.
Despite selling this massive quantity in a short time, Metalpha still holds 51,300 ETH, worth approximately $120 million, in the company’s treasury. If the asset manager maintains its current selling rate, it could deplete its Ethereum holdings by the end of this week.
These substantial deposits have attracted the attention of the crypto community with these large transactions holding the power to influence the ETH price.
Currently, the ETH price is showing 2% gains in the last 24 hours shooting past $2,350 levels. The broader crypto market has been closely watching the macro developments and the upcoming Fed rate cuts in the next week.
Popular economist Peter Schiff stated:
“The Fed rate cuts won’t prevent a recession. In fact, the U.S. economy has likely been in a recession for some time, though it hasn’t been officially confirmed yet. While short-term rates may fall, long-term rates and inflation will rise, along with unemployment. Game over”.
