Ethereum price ‘cup and handle’ pattern hints at potential breakout versus Bitcoin

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Ethereum’s native token Ether (ETH) has rebounded 40% in opposition to Bitcoin (BTC) after bottoming out regionally at 0.049 on June 13. Now, the ETH/BTC pair is at two-month highs and may lengthen its rally within the coming weeks, in response to a traditional technical sample.

ETH paints cup and deal with sample

Particularly, ETH/BTC has been forming a “cup and handle” on its lower-timeframe charts since July 18. 

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A cup and deal with setup usually seems when the worth falls after which rebounds in what seems to be a U-shaped restoration, which seems to be like a “cup.” In the meantime, the restoration results in a pullback transfer, whereby the worth tendencies decrease inside a descending channel known as the “deal with.”

The sample resolves after the worth rallies to an roughly equal dimension to the prior decline. The ETH/BTC chart under illustrates the same bullish technical setup.

ETH/BTC four-hour worth chart. Supply: TradingView

Notably, the pair now trades decrease contained in the deal with vary however might pursue a restoration towards the neckline resistance close to 0.071 BTC. Afterward, a decisive cup and deal with breakout above the neckline stage may lead ETH/BTC to 0.072, up 12.75% from right this moment’s worth.

The success price of the cup and deal with sample in reaching its revenue goal is 61%, according to veteran investor Tom Bulkowski. 

The Merge issue

The bullish setup for ETH/BTC additionally takes cues from Ethereum’s community transition from proof-of-work (PoW) to proof-of-stake (PoS) doubtlessly by way of “the Merge” slated for mid September.

Associated: Will Ethereum Merge hopium continue, or is it a bull trap?

In the meantime, market analyst Michaël van de Poppe says that Ether might see extra upside versus Bitcoin as a result of Merge hype as momentum builds within the coming weeks. 

Van de Poppe anticipates ETH/BTC to check 0.072, the cup-and-handle revenue goal, as interim resistance whereas holding both 0.0645 or 0.057 stage as assist.

ETH/BTC weekly worth chart. Supply: TradingView/Michaël van de Poppe

Conversely, the vary of dangers for Ethereum with the Merge replace embrace potential technical issues, delays or perhaps a contentious arduous fork. As an example, a bug had split the Ethereum chain throughout a 2020 community improve.

The views and opinions expressed listed below are solely these of the creator and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer includes danger, it is best to conduct your personal analysis when making a choice.