Crypto Analyst Benjamin Cowen Warns Ethereum Holders of Potential Q4 Bearish Trend

Popular crypto analyst Benjamin Cowen has a warning for Ethereum (ETH) holders. He believes that ETH could turn bearish in the last quarter of the year.

Cowen, who has 861,500 followers on X, points out that ETH might be following a pattern similar to what we saw in 2016. If this pattern holds, we could see a dip in Q4.

However, he also mentions the possibility of significant gains in the first half of next year. “ETH went green in September, and the 2016 pattern is still tracking. If it continues, Q4 could be red, but we might see green in H1 2025,” he explains. He notes that Q4 2019 was also red for ETH, though October had a slight uptick. It’s important to watch these trends until they change.

As of now, Ethereum is trading at $2,375, down 3.3% in the last 24 hours.

Cowen also discusses Tether Dominance (USDT.D). He suggests that for Bitcoin (BTC) to start rallying, Tether's dominance may need to drop below a key trend line on the weekly chart. This drop would indicate that investors are using their stablecoins to buy other cryptocurrencies.

He points out that a declining percentage of Tether’s market cap compared to other cryptocurrencies has historically signaled Bitcoin uptrends. “I posted about USDT dominance hitting its long-term trend line on March 14, 2024, which marked a local top for BTC. We often convince ourselves this time is different, but USDT dominance has been making higher lows since then,” he adds. “This trend line needs to break before any real rally can start.”

Lastly, Cowen shares a chart of the logarithmic regression band for the crypto market cap. This chart helps track the fair value of the asset class using data that isn't inflated by bubbles. Based on historical trends, he believes the crypto market may not exceed fair value until early next year.

“In the last cycle, we went durably overvalued by the end of the halving year. But in the cycle before that, it wasn’t until the first or second quarter of 2017. And even earlier, it wasn’t until the first quarter of 2013. So, we might see a market that doesn’t durably go overvalued until next year. If that happens, it wouldn’t be unusual. It would actually align with what previous cycles have shown,” he concludes.