Why is Ethereum 'exhausted' in this bullish cycle? Experts reveal surprising reasons.
While Bitcoin and many altcoins are taking advantage of the strong upward momentum in the market, Ethereum (ETH) – the second largest cryptocurrency in the world – is showing signs of 'exhaustion.'
Renowned analyst Benjamin Cowen has just provided an interesting perspective on this.
Is Ethereum… repeating 2019?
According to Cowen, the current price chart of Ethereum resembles a '10x enlarged copy' compared to the 2019 market cycle.
He believes that ETH is still following its familiar growth structure, but the reason this cycle seems unusual is that it has lasted much longer.
The main reason for the sluggish recovery of ETH, according to Cowen, is the 'quantitative tightening' (QT) policy of the US Federal Reserve (Fed).
In the previous cycle, QT ended before Bitcoin's halving. But now, we have entered the second half of the halving year 2024, and QT has not yet stopped.
Is the monetary policy 'holding back' ETH?
QT is the process by which central banks reduce the money supply to control inflation. This means that the flow of money into risky asset markets like crypto will slow down.
However, Cowen expects QT to end by mid-2025, based on the minutes from the January 2025 meeting of the Federal Open Market Committee (FOMC).