Ethereum has already faced strong selling pressure slipping nearly 10% on the weekly chart with the ETH price dropping to $2,366 levels currently. Some market analysts believe that the ETH market rout has just begun with the possibility of another 50% drop as per the log regression model.
Ethereum Regression Model Hints Major Crash
With the log regression model, popular crypto analyst Benjamin Cowen explains that whenever Ethereum (ETH) has broken support against Bitcoin, the ETH/USD pair has faced a 70% drop to the lower logarithmic regression trend line. As of now, ETH is already down 41%, raising concerns that a similar scenario could unfold this year. Currently, the ETH price dropped 1.14% at $2,366 losing over $50 billion from its market cap over the past week.
Courtesy: ETHUSD
Historically, these sharp declines occurred in Q4 2016 and Q4 2019, suggesting that a similar pattern might emerge in Q4 2024.
Although several market players have been optimistic regarding a potential ‘Uptober’ rally, some experts like Benjamin Cowen have also warned that it would be wise to consider the downside risks as well. In one of his posts back in August, Cowen issued a warning: “I think it will get a big drop before EOY to ~$1200 and then bounce into 2025”.
This means that the Ethereum price could be preparing for another 50% correction from the current levels. Some market analysts have rebuffed Cowen’s analysis stating that his analysis doesn’t apply during the Bitcoin halving year. Responding to this, Cowen wrote:
“In Q4 2016 ETH went to the regression band which was a halving year. Honestly, the whole “But this is a halving year!” argument is getting kind of old. You could have said the same thing when ETH was $4k, and it still dropped to $1900″.
ETH Price Plummets As Investors’ Sentiment Drops
Earlier this week, Bitcoin and altcoins came crashing down amid the escalating Isreal-Iran conflict, and against everyone’s expectations of an ‘Uptober’ rally. On the other hand, the Ethereum ICO whales have continued to sold their holdings showing that the long-term investors are losing confidence in the asset class.
Also, the total flows into spot Ethereum ETFs have been boring as institutional players prefer BTc over ETH in current market uncertainties.
However, despite this, co-founder Vitalik Buterin has been focusing on the next big measures within the ecosystem. A day before, he proposed reducing the minimum ETH staking requirement by half to 16 ETH.
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