Ethereum Faces Pain as Fed's Tightening Continues

Analyst Benjamin Cowen has recently shared his insights on the current state of Ethereum (ETH), suggesting that the cryptocurrency is likely to experience a period of "pain" before it can rebound. In a recent video, Cowen addressed his subscribers, emphasizing the necessity of a change in monetary policy for ETH's chart against Bitcoin (BTC) to reach its bottom. He noted that such a change typically requires a phase of market pain, which he believes is currently underway.

Cowen drew parallels between the current market cycle and the 2019 cycle, highlighting that ETH's support level against the US dollar broke just before the Federal Reserve ended quantitative tightening in 2019. He observed that the current cycle is mirroring the events of 2019 but on a longer timeframe. Cowen pointed out that the price points of the current cycle are roughly ten times higher than those in 2019, which he believes is contributing to the difficulty in navigating the market.

The analyst explained that the primary difference between the current cycle and the previous one is the lack of a change in monetary policy. In the 2019 cycle, a change in monetary policy occurred in the pre-halving year, whereas in the current cycle, despite being in the post-halving year, there has been no significant change in quantitative tightening. Cowen noted that while the Federal Reserve has slowed down the tapering process, it has not stopped it entirely.

Cowen's analysis suggests that the current market conditions are a result of the prolonged quantitative tightening, which has not yet been addressed by a change in monetary policy. He believes that this situation is causing the market to experience pain, which is necessary for a potential rebound. Cowen's insights provide a perspective on the current state of Ethereum and the broader cryptocurrency market, highlighting the importance of monetary policy changes in shaping market cycles.