Ethereum at Risk of Major Drop if Stock Market Weakens Further

In his latest strategy session, Cowen explained that historical trends suggest ETH may also face downward pressure if the broader financial markets experience ongoing volatility.

Weakness in the S&P 500 Could Impact ETH

Cowen pointed out that the S&P 500 index has already shown signs of weakness between February and March, following the expiration of options contracts, a trend he had anticipated. However, he noted that this weakness could extend further into April, which may have a direct effect on Ethereums price. He attributed this possible continuation of weakness to a few factors, including uncertainty surrounding new tariffs announced on April 2nd, as well as an influx of macroeconomic data coming out in early to mid-April. This combination of factors could create an environment of increased inflation expectations, which tends to affect both the stock market and cryptocurrencies like ETH.

Im wondering is what happens if you do see the S&P 500 continue to show weakness into early to mid-April? With all these tariffs, it could potentially have an effect on inflation Cowen said.

Ethereums Potential to Drop to $1,044

Given the potential for continued weakness in the stock market, Cowen predicts that Ethereum might experience a significant price correction. He mentioned the possibility of ETH dropping to its logarithmic trendline, potentially as low as $1,044. This would be in line with what he believes could be a larger market move driven by recessionary pressures, which would see ETH testing lower levels before making a recovery.

Im just looking over here at ETH/USD on the weekly chart, and I see a triple top, and I just have to wonder does it ultimately culminate in a recession, where everyone thinks that by the time the recession is declared its over, but the reality is the market was pricing it in well ahead of time Cowen explained. You get this big drop and then a big move out of it.

A Potential Recovery to $3,000

Despite his cautious short-term outlook, Cowen also highlighted a potential long-term recovery for Ethereum. He believes that if Ethereum were to drop to around $1,044, it could eventually find support at the $3,000 level, which has been a significant price point for ETH in the past. His analysis suggests that while a decline might be imminent in the short term, Ethereum has the potential to recover and regain its bullish momentum once broader market conditions stabilize.

Looking Ahead: Recession and Market Sentiment

Cowens predictions reflect the broader concerns over economic uncertainty and recessionary pressures that could affect both traditional financial markets and cryptocurrencies. His analysis suggests that markets are already pricing in a recession well ahead of time, and this could lead to a sharp market decline followed by a potential rebound.

As always, Cowens predictions should be taken with caution, as market conditions can change rapidly. However, his insights on Ethereums price dynamics provide an interesting perspective for investors as they navigate the complexities of the current financial environment.