Widely followed cryptocurrency analyst Benjamin Cowen is warning that Ethereum (ETH) may collapse due to at least one big economic worry.
In a new strategy session, Cowen tells his 779,000 Youtube subscribers that the leading smart contract platform could decline by more than 65% from its current price of $1,174.
“I do think you’re still looking at a leg lower here on Ethereum’s valuation against the US dollar. I think around that $400-$600 range is a good spot to begin looking for that same type of value that we saw in the last cycle.”
Cowen is also keeping a close watch on the social risk metric, an indicator that gauges retail interest in the space by tracking the number of people tuning in to crypto YouTube channels and following accounts on Twitter dedicated to digital assets.
According to Cowen, Ethereum’s social risk metric suggests that ETH is setting up for another sell-off event.
“I still think Ethereum is likely looking at lower prices eventually. I think this is supported by the idea of the social risk. Social risk is finally putting in new lows. When the social risk is going down typically the Bitcoin dominance goes up…
As a social risk plummets like it did back over here in 2018, that was where Ethereum took its next leg down.”
Cowen also says that a looming recession, likely to be triggered by the Federal Reserve’s sustained interest rate hikes, would drive Ethereum way down.
“I understand that you know a $600 Ethereum or even a $400 Ethereum is another 50% correction or more from these levels. But I do think there is reason to think that it could happen, not only from a price perspective and a technical perspective.
And I know there’s sort of the fundamental idea of all the Ethereum that’s been burned and whatnot. But the other side of it is that we are looking at a recession…
If a recession is coming, it’s likely not a good thing for risk assets like cryptocurrencies.”
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