Widely followed crypto analyst Benjamin Cowen warns that Ethereum (ETH) could see a major correction as he believes the leading altcoin is about to retest a long-term trend indicator before another bull market can emerge.
In a new strategy session, Cowen tells are 785,000 YouTube subscribers that Ethereum has been respecting the fair-value logarithmic regression band as support since 2017.
According to the analyst, the logarithmic regression band is designed to track the fair value of an asset using “non-bubble data”.
Cowen says that in an optimistic scenario, Ethereum could retest the upper limit of the trend indicator, which he thinks coincides with ETH’s low bear market around $875.
“Now, an interesting development is that the fair value of Ethereum according to this fit to non-bubble data is $875, but the previous low was actually $880. So they are essentially the same.
If Ethereum went back to its previous low, that would bring it back home. And we talked about that a year ago. I said, ‘Look guys, what I think is going to happen is we go down to the regression band or we go sideways until it catches up.’ If we dumped now, if we dumped to what I called home earlier, that would basically match the earlier low.
At worst, Cowen says ETH could trade briefly below the logarithmic regression trendline, similar to what happened in March 2020.
“That doesn’t mean you can’t go below that level. As you can see, we went completely below the full regression band in March 2020. And in fact, during that drop, it went about 34% below the regression band.
If we had another similar decline, like 34% below this level, that would equate to about $400 Ethereum. case scenario environment.”
Ethereum is trading at USD 1,736 at the time of writing, a fractional increase over the past 24 hours.
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