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Facing significant selling pressure, Ethereum (ETH) has lost over $50 billion in market cap this week. Historical data indicates a possible 50% price correction, leading analysts like Benjamin Cowen to predict a drop to $1,200.
Ethereum Price Faces Historical 50% Correction Risk
Benjamin Cowen, a well-known crypto analyst, uses the log regression model to show that the ETH/USD pair has had a 70% decline to the lower logarithmic regression trend line whenever Ethereum (ETH) has broken support against Bitcoin.
According to Coingape, ETH is currently down 41%, which has sparked worries that a comparable situation could occur this year. Ethereum has lost more than $50 billion in market cap in the last week, and its price has fallen 1.14% to $2,366 at the moment.
$50 Billion in Losses Point to Further Declines
These precipitous drops happened in the fourth quarter of 2016 and 2019; therefore, it's possible that 2024 may follow a similar pattern.
Despite the optimism of certain market participants regarding a possible 'Uptober' rally, experts such as Benjamin Cowen have cautioned that it is prudent to carefully examine the hazards on the downside. "I think it will get a big drop before EOY to ~$1200 and then bounce into 2025," Cowen said in an August post.
Analysts Warn of $1,200 Target for ETH
This suggests that Ethereum's price might be getting ready for another 50% drop from where it is now. In response to Cowen's estimate, other market analysts have argued that it is irrelevant to the year in which Bitcoin will be halved.
Institutional Moves Away from Ethereum Deepen Market Concerns
Amidst the intensifying Israeli-Iranian crisis and contrary to everyone's predictions of a 'Uptober' rally, Bitcoin and altcoins crashed earlier this week. However, long-term investors' continuing sales of Ethereum ICO holdings indicate that they are losing faith in the asset class as a whole.
In addition, institutional investors are favoring BTC over ETH due to the present market uncertainty, which has resulted in dull total flows into spot Ethereum ETFs.
