The cryptocurrency market continues to navigate a complex macroeconomic landscape, with Ethereum (ETH) drawing increasing attention from analysts for its striking resemblance to past cycles. According to prominent crypto analyst Benjamin Cowen, Ethereum is currently retracing the same path it followed in 2019 — a prolonged period of consolidation and pressure that may only resolve after a significant shift in monetary policy.
Cowen, known for his data-driven market analysis and followed by over 886,000 subscribers on YouTube, recently emphasized that Ethereum must endure a "pain period" before any sustainable recovery can take place. This phase, while uncomfortable for investors, is a necessary precursor to long-term growth.
“The ETH/BTC pair needs a change in monetary policy to finally bottom out,” Cowen explained. “And for that policy shift to happen, pain must first be experienced. Welcome to the pain phase — this is the required suffering.”
Parallels Between 2019 and Today’s Market Cycle
One of the most compelling arguments Cowen presents is the structural similarity between today’s market dynamics and those of 2019. Back then, the ETH/BTC ratio only found its true bottom after Ethereum’s price in U.S. dollars broke below key support levels — a moment that coincided closely with the Federal Reserve pausing its quantitative tightening (QT) program.
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Today, despite being in a post-halving environment for over a year, there has been no definitive pivot in U.S. monetary policy. While the pace of QT has slowed slightly, the Fed has not yet signaled a full stop or reversal — a critical difference from the 2019 cycle, where policy easing began nearly a year before the halving.
“This entire cycle is essentially a replay of 2019,” Cowen noted, “but stretched over a longer timeframe. Most price points we’re seeing now are roughly 10x what they were back then — but the underlying behavior remains the same.”
This extended timeline has made it harder for many investors to recognize the pattern. Without the psychological anchor of an imminent or recent policy shift, market sentiment remains cautious, contributing to sideways movement and volatility in both ETH and BTC.
Why Monetary Policy Matters for Crypto
Cryptocurrencies, especially major assets like Ethereum and Bitcoin, are increasingly sensitive to macroeconomic signals. As risk-on assets, their valuations tend to improve when liquidity increases — typically triggered by central bank easing, rate cuts, or balance sheet expansion.
Conversely, during periods of tightening — like the ongoing QT cycle — capital becomes scarcer, risk appetite declines, and crypto markets often contract.
Cowen stresses that until the Federal Reserve clearly shifts toward dovish policy — such as cutting interest rates or halting QT — technical indicators alone won’t be enough to drive a sustained rally in ETH/BTC.
“The pain isn’t arbitrary,” he said. “It’s systemic. The market is forcing participants to price in reality before any real recovery can begin.”
Broader Market Context: Equities Rise Amid Strong Data
Despite crypto’s hesitation, traditional financial markets have shown resilience. Strong U.S. non-farm payroll (NFP) data for June signaled continued economic strength, even amid trade tensions and tariff impacts. The robust employment figures cooled expectations for a July rate cut by the Federal Reserve.
As a result:
- The 10-year U.S. Treasury yield rose to 4.35%
- The S&P 500 reached a new high at 6,279 points
- The Nasdaq surged 1.02%, closing above 20,600
- The Dow Jones Industrial Average (DJIA) gained 0.77%, testing its highest level in five months
Global risk sentiment improved, pushing up assets like GBP/JPY while pressuring traditional safe-havens like the Japanese yen. Notably, USD/JPY declined by 9% in the first half of 2025 — one of its weakest performances in recent years — reflecting shifting capital flows and changing yield differentials.
Bitcoin Nears All-Time High Amid Mixed Sentiment
While Ethereum awaits macro catalysts, Bitcoin (BTC) has been showing strength. On July 4, BTC climbed as high as $110,529**, briefly surpassing $110,000 before pulling back slightly to trade around $109,483** at press time.
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Despite concerns about overheating or short-term overbought conditions, some analysts argue that bullish momentum could accelerate further if institutional inflows continue.
With Bitcoin now just $1,000 away from its all-time high, investor focus is intensifying. However, history suggests that such proximity doesn’t guarantee a breakout — especially without supportive macro conditions.
Key Takeaways for Investors
- Ethereum’s recovery depends on macro shifts, not just on-chain metrics or ecosystem growth.
- The absence of a clear Fed pivot is prolonging the consolidation phase.
- Historical patterns suggest that pain precedes gains — patience may be rewarded.
- While equities and Bitcoin show strength, Ethereum may lag until broader liquidity improves.
Frequently Asked Questions (FAQ)
Q: What does “ETH/BTC needs monetary policy change to bottom” mean?
A: It means the ratio of Ethereum’s value relative to Bitcoin is unlikely to stabilize or rise until central banks — particularly the U.S. Federal Reserve — ease monetary policy (e.g., cut rates or stop balance sheet reduction). Such shifts increase liquidity and risk appetite, benefiting altcoins like ETH.
Q: Why is 2019 being compared to today’s market?
A: In 2019, ETH/USD broke key support levels just before the Fed paused tightening. That moment marked the start of a major rally. Today’s market shows similar technical behavior but lacks the concurrent policy shift — hence the extended "pain period."
Q: How long might this consolidation last?
A: There's no fixed timeline, but Cowen suggests it could last until clear evidence of monetary easing emerges — possibly in late 2025 or early 2026, depending on inflation and labor market trends.
Q: Is Bitcoin’s rise bearish for Ethereum?
A: Not necessarily. While BTC dominance can suppress altcoin performance short-term, long-term Ethereum fundamentals — including staking yields, Layer-2 adoption, and network upgrades — remain strong.
Q: Should I sell Ethereum now?
A: Market timing is difficult. Analysts like Cowen advise focusing on long-term cycles rather than short-term noise. If you believe in Ethereum’s utility and future demand, holding through volatility may be more rewarding than exiting prematurely.
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Final Thoughts
Ethereum’s current struggle reflects more than just technical weakness — it’s a reflection of broader financial conditions. Until central banks shift toward easier money policies, assets like ETH may continue facing headwinds.
But as history shows — especially in 2019 — these challenging phases often lay the foundation for powerful rallies. For patient investors, today’s uncertainty could be tomorrow’s opportunity.
By understanding the interplay between crypto markets and macroeconomic forces, traders can make more informed decisions — positioning themselves not just to survive the pain period, but to thrive when the cycle finally turns.
Core Keywords: Ethereum, ETH/BTC ratio, monetary policy, market cycle, Federal Reserve, quantitative tightening, Bitcoin price prediction