Ethereum’s native token Ether (ETH) rallied 40% against Bitcoin (BTC) after bottoming locally at 0.049 on June 13. Now, the ETH/BTC pair is at two-month highs and may extend its rally in the coming weeks, according to a classic technical pattern.
ETH paints cup and handle pattern
Specifically, ETH/BTC has been forming a “cup and handle” on its lower time frame charts since July 18.
A cup and handle setup usually appears when price falls and then bounces off what appears to be a U-shaped recovery, which looks like a “cup”. Meanwhile, the recovery leads to a retracement movement, in which the price tends to go down within a descending channel called a “handle”.
The pattern resolves after the price rises to roughly the same size as the previous drop. The ETH/BTC chart below illustrates a similar bullish technical setup.
ETH/BTC four-hour price chart. Source: TradingView
Notably, the pair is now trading lower within the handle range but could look for a recovery towards neckline resistance near 0.071 BTC. Subsequently, a decisive breakout of the cup and handle above the neckline could take ETH/BTC to 0.072, up 12.75% from today’s price.
The success rate of the cup and handle pattern in reaching your profit target is 61%, according to veteran investor Tom Bulkowski.
The bullish setup for ETH/BTC is also based on the transition of the Ethereum network from proof-of-work (PoW) to proof-of-stake (PoS) potentially via “the merger” scheduled for mid-September.
Related: Will Ethereum Merge Hopium Continue, Or Is It A Bull Trap?
Meanwhile, market analyst Michaël van de Poppe He says that Ether could see more upside against Bitcoin due to Merge hype as momentum builds in the coming weeks.
Basically a few levels in $ETH.
Facing resistance at 0.0725 $BTC.
In general, a further push towards the merger is expected in September. pic.twitter.com/QpmkyTwjyb
— Michael van de Poppe (@CryptoMichNL) July 23, 2022
Van de Poppe anticipates that ETH/BTC will test 0.072, the cup and handle profit target, as interim resistance while holding the 0.0645 or 0.057 level as support.
ETH/BTC weekly price chart. Source: TradingView/Michaël van de Poppe
Rather, the range of risks to Ethereum with the Merge update includes potential glitches, delays, or even a contentious hard fork. For example, a bug split the Ethereum chain during a network upgrade in 2020.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
This post Ethereum Price ‘Cup and Handle’ Pattern Hints at Potential Breakout Against Bitcoin
was published first on https://cointelegraph.com/news/ethereum-price-cup-and-handle-pattern-hints-at-potential-breakout-versus-bitcoin