Benjamin Cowen, CEO of Into The Cryptoverse (ITC), points out a reliable indicator on the ETH/BTC chart that can help investors gauge the next direction of the altcoin market.
Cowen called attention to this indicator amid the ongoing market-wide bloodbath that has pushed multiple altcoins to shocking lows. Notably, the altcoin market cap (TOTAL2) has dropped below the $1 trillion market cap as a result of the crash.
Altcoin Market Crash
Consequently, the market has slumped 21.34% in August so far. Its value currently stands at $791 billion, marking a seven-month low. Amid this bearish pressure, Cowen spotlighted a warning he gave earlier in the year when most market analysts envisioned a market upsurge.
At the time, the altcoin market cap hovered around $950 billion to $1 trillion amid a period of mild declines. Most market watchers called the bottom, suggesting that the market could only surge from that point. However, Cowen was not convinced.
The market veteran warned that the dip at the time could lead to steeper declines. He based his argument on the ETH/BTC chart, which gauges Ethereum’s performance against Bitcoin. Whenever the ETH/BTC ratio increases, it suggests that Ethereum is outperforming Bitcoin. However, a decline indicates an ETH slump against BTC.
A Crucial Indicator in the ETH/BTC Ratio
Notably, being the largest altcoin, Ethereum’s performance, especially in comparison to Bitcoin, is an important metric for gauging the health of the overall altcoin market. As of mid April, Cowen stressed that the ETH/BTC chart had broken below critical support.
The market analyst warned that this occurrence was worthy of note, as a similar occurrence in 2019, which coincided with a rate cut from the Federal Reserve, led to a massive 70% collapse in the altcoin market over a 6 to 9-month period.
Cowen’s commentary at the time suggested that, with the break below support for the ETH/BTC ratio, the altcoin market could record declines reminiscent of the 2019 cycle in the next few months. This pattern has played out in the current market bloodbath. Notably, the altcoin market has collapsed 22% since Cowen’s disclosure.
The market veteran recently pointed out his previous warning, noting that the signs were present. Cowen implied that investors should closely monitor the ETH/BTC chart. According to him, the ratio is a reliable indicator for assessing the overall health of the altcoin market.
The warning signs were there. #ETH / #BTC is a great indicator for understanding the health of the altcoin market. https://t.co/PUKPJF4NpW
— Benjamin Cowen (@intocryptoverse) August 5, 2024
As of press time, the ETH/BTC ratio currently stands at 0.0446, down 3.63% today. While the overall market has taken a hit, Bitcoin has shown greater resilience than Ethereum and other altcoins. This has led to constant declines in ratios of altcoins against Bitcoin, including ETH/BTC.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
