Can Bitcoin’s Halving Event Affect Ethereum’s Price?

• Cowen suggested that Ethereum could be negatively impacted. According to Cowen, this season has not been particularly positive for ETH in the past, and this cycle might not be any different.
• At the time of writing, ETH was trading at $1,590, representing a 12.61% decrease over the past 30 days.
• At the time of writing, the Short-Term Holder Net Unrealized Profit/Loss (STH-NUPL) had transitioned from hope (orange) to capitulation (red). This transition implies that market participants are expecting further declines in ETH’s price.

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Analyst Benjamin Cowen explored how Bitcoin’s halving event might affect Ethereum: Can Ethereum experience further declines?

Effects of Bitcoin Halving on Ethereum

Analyst Benjamin Cowen suggested that Ethereum might be negatively affected by Bitcoin’s pre-halving second phase. According to Cowen, this season has not been particularly positive for ETH in the past, and this cycle might not be any different.

Cowen noted that ETH was in a tough spot before the 2020 halving. He also mentioned that the altcoin only recovered after the four-year event had concluded.

While Cowen acknowledged some intermittent positives for ETH, most of them were short-lived. Consequently, ETH’s potential moves will likely involve lower peaks for the rest of the year and possibly into the first quarter of 2024.

When a price of an asset closes higher than the high of the previous day’s close, it is considered a lower high. Cowen stated:

“This doesn’t mean Ethereum can’t rally at different times during different phases. But the overall trajectory should be down.”

At the time of writing, ETH was trading at $1,590, representing a 12.61% decrease over the past 30 days. Regardless of the price movement, several indicators suggest that the value of the altcoin might remain low.

However, according to Cowen’s prediction, ETH could remain undervalued until the end of the year. So, what do short-term holders of Ethereum think?

One metric that answers this question is the Short-Term Holder Net Unrealized Profit/Loss (STH-NUPL) metric. Used to assess the behavior of short-term investors, STH-NUPL takes into account UTXOs (Unspent Transaction Outputs) that are 155 days old or younger.

A UTXO represents an Unspent Transaction Output and reflects where each transaction begins and ends. At the time of writing, STH-NUPL had transitioned from hope (orange) to capitulation (red). This transition implies that market players share the view that ETH’s price might decline further.

Price Prediction for ETH

On the other hand, a trader known as Daan Crypto believes that Ethereum’s performance against BTC in this cycle has been impressive. According to their post on X (formerly Twitter), Ethereum has moved much more steadily compared to other altcoins, even in the face of low volatility.

However, like the general sentiment, Daan also expects Ethereum to continue losing dominance to Bitcoin. At the time of writing, ETH was valued at 0.063 against BTC. Daan suggested that it could drop to 0.055, but also considered this value to be a good entry point.