Ethereum's Price Cycle Extended by 10x Due to Quantitative Tightening

Ethereum (ETH) has been underperforming in the current market cycle, according to popular crypto analyst Benjamin Cowen. In a recent YouTube video, Cowen noted that Ethereum's recent price movements closely resemble its 2019 cycle, but on a much larger scale. He observed that ETH’s price points appear to be a 10x reflection of what they were six years ago. This similarity in price structure, however, has unfolded over a significantly longer period this time around.

Cowen attributes this extended cycle to the prolonged duration of quantitative tightening (QT). QT is a monetary policy tool used by central banks to reduce the money supply in the economy, thereby combating inflation. In the previous cycle, QT ended in the pre-halving year, but this time, QT has persisted well into the post-halving year and is expected to continue for a few more months. According to Cowen, a document summarizing a Federal Open Market Committee meeting in January suggests that the U.S. Federal Reserve might conclude QT by mid-2025.

The analyst's observations highlight the impact of macroeconomic factors on cryptocurrency markets. The extended QT period has created a different market environment compared to previous cycles, affecting Ethereum's performance. Despite these challenges, Ethereum remains the second-ranked crypto asset by market cap, reflecting its enduring significance in the digital asset landscape.