Ethereum (ETH) Price Can Drop to $1,200 Following Fed Rate Cuts, Analyst Warns

Crypto analyst Benjamin Cowen recently stated that the current wedge pattern of the Ethereum (ETH) price is very similar compared to the lows of the 2019 wedge.

Despite a recent recovery above the $2,350 levels, market analysts suggest that ETH may face further challenges. Historical chart patterns indicate that upcoming Fed rate cuts could spell trouble for altcoins like Ethereum (ETH).

According to crypto analyst Benjamin Cowen, the current wedge pattern of the ETH price closely resembles the lows of the 2019 wedge. In 2019, ETH fell back to its wedge before the first rate cut, mirroring a similar scenario in the present 2024 cycle.

Following the first rate cut in 2019, ETH dropped below its wedge, eventually leading to a bottom in the ETH/BTC pair. Based on these historical patterns, Cowen predicts that ETH could drop to $1,200 by December.

Moreover, the ETH/BTC pair broke down in 2016 and 2019, leading to a 70% decline in ETH/USD to a risk level of 0.300. Applying this to the current risk levels indicates a potential drop in the Ethereum price to $1,208.

Cowen anticipates a soft landing for ETH, with a possible rebound in the first half of 2025. However, he advises traders to make their own decisions and acknowledges the possibility of being wrong.

Recent top players' activity shows that the Ethereum whale activity has shot up recently, with entities like the Ethereum Foundation and Vitalik Buterin reducing their ETH holdings over the last few weeks.

Furthermore, Hong Kong-based asset manager Metalpha has sold nearly 40% of its ETH holdings in the past four days, according to recent on-chain data.

Earlier today, the Bitmain-affiliated asset manager sold 10,000 ETH, valued at $23.5 million. In total, Metalpha has moved 33,589 ETH to the crypto exchange Binance over the last four days, as reported by blockchain analytics firm Lookonchain.

Despite selling this large quantity in a short time, Methe still holds 51,300 ETH, or roughly $120 million, in its treasury. If the asset manager continues selling at this rate, it could exhaust its Ethereum holdings by the end of this week.

Metalpha deposited 10,000 $ETH($23.45M) again 15 mins ago.#Metalpha has deposited a total of 33,589 $ETH($77.55M) to #Binance in the past 4 days and currently holds 51.3K $ETH($120M).https://t.co/fTHHLpCEfr pic.twitter.com/SAJYTaSPp0

These large transactions, especially from top institutions, attract the attention of the crypto community, as they have the potential to influence the ETH price.

Currently, the ETH price shows 2% gains in the last 24 hours, surging past the $2,350 levels. The broader crypto market has been keeping a close watch on macro developments and the upcoming Fed rate cuts next week.

Popular economist Peter Schiff stated, "The Fed rate cuts won’t prevent a recession. In fact, the U.S. economy has likely been in a recession for some time, though it hasn’t been officially confirmed yet. While short-term rates may fall, long-term rates and inflation will rise, along with unemployment. Game over."