- An analyst has predicted that Ethereum (ETH) could continue its downturn to trade below $1000 within a short period.
- Another analyst has predicted that ETH could decline by 50% due to the Federal Reserve’s Quantitative Tightening.
Ethereum (ETH) is currently one of the most affected cryptos in the ongoing broad market bloodbath, as it has declined by 8% in the last 24 hours and 11% in the last seven days.
According to our market data, the asset was trading at $1,600 at press time. However, it had earlier fallen to $1,400 to retest its lowest point since March 2023. Though the market seems to be recovering on its one-hour chart, market expert Peter Schiff believes that the asset will continue its downtrend.
Speaking to his 1.1 million followers on X, Schiff highlighted that ETH’s decline below $1,500 is the worst it has ever been in two years. According to him, “it would not take long before the asset breaks below $1000”. Fascinatingly, this aligns with the prediction of Senior Macro Strategist at Bloomberg Intelligence, Mike McGlone, which was detailed in our last news piece.
On-Chain Activities of Ethereum (ETH)
While some investors still anticipate a short-term rebound to a reasonable range, on-chain activities suggest otherwise, as more than 440,000 ETH ($640 million) have liquidation prices concentrated above $1000.
Further analyzing the liquidation distribution and historical holding costs, we found that 182,000 ETH are currently concentrated around $1,450 for liquidation. Fascinatingly, the $1,653 and $1,590 are forming a strong resistance level. Amidst the backdrop of this, ETH whales are slowly reducing their positions as previously mentioned in our report.
Benjamin Cowen Speaks on Further Price Decline
According to Glassnode data, only 31% of ETH addresses are currently in profit. Meanwhile, analyst Benjamin Cowen believes that things could get worse as the market may decline by another 50% from the current level.
The first thing to note is that ETH is better observed on its Bitcoin pair than its USD pair.
In a comprehensive post, Cowen highlighted that the significant decline of the asset is largely linked to the Federal Reserve’s Quantitative Tightening. Technically, this has to do with the decision of the Federal Reserve to reduce its balance sheet through the selling of government bonds. In an economic sense, this tends to increase interest rates while reducing liquidity.
ETH continues to drop against Bitcoin primarily due to ongoing quantitative tightening…Even though it’s not blowing as hard, the wind is still blowing in the wrong direction.
Shedding more light on this, Cowen explained that ETH has previously found its bottom after the end of the Quantitative Tightenings. However, this is yet to occur in the current cycle. Likening this to the stock market meltdown in 1990 and 1998, Cowen highlighted that economic uncertainties and triple-top patterns usually occur before the market witnesses an explosive surge.
Meanwhile, ETH’s rebound is expected to be a key catalyst for the growth of Shiba Inu (SHIB). As noted in our earlier post, an analyst identified as SHIB KNIGHT believes that the two are highly correlated, as evident in SHIB’s decline in the first quarter of 2025 (Q1 2025) when ETH fell by 45%.
