Ethereum's prospects for reaching new all-time highs in 2026 appear limited, according to recent analysis by Benjamin Cowen, a widely followed cryptocurrency analyst. While Cowen had previously suggested Ethereum could reach a market cycle top before January 2026, with a potential price range of $5,300 to $7,500 based on a harmonic pattern called the "butterfly effect," his more recent analysis suggests a more tempered outlook.
Cowen's analysis emphasizes the importance of understanding Ethereum's performance in relation to Bitcoin and broader macroeconomic factors. He highlights that Ethereum's Bitcoin valuation behaves like an oscillator, experiencing cycles of strength and weakness. Currently, the ETH/BTC ratio is near historical lows, suggesting a potential bottom, but also the possibility of further decline. Cowen attributes this decline to monetary policy, specifically quantitative tightening.
Cowen suggests that if the Federal Reserve were to end quantitative tightening, Ethereum's Bitcoin valuation would likely bottom out, potentially setting the stage for a recovery. However, he cautions that even if the ETH/BTC ratio bottoms out, Ethereum's USD valuation will remain dependent on Bitcoin's performance.
Adding to the discussion, Arthur Hayes, co-founder of BitMEX, has revealed he has started buying Ethereum again, citing positive chart signals and predicting it could reach $20,000 this cycle. This bullish sentiment is further supported by increasing institutional investment, with Ethereum spot ETFs seeing significant net inflows. Additionally, some Bitcoin whales have begun shifting their holdings into Ethereum, indicating a strategic portfolio rebalancing.
Despite these positive indicators, Cowen's analysis suggests that Ethereum's potential for reaching new all-time highs in 2026 is constrained by its relationship with Bitcoin and the prevailing macroeconomic environment. While a recovery is possible, Cowen emphasizes the importance of patience and a long-term perspective. He also advises investors to monitor the Federal Reserve's monetary policy and Ethereum's Bitcoin valuation to make informed decisions.
