August 14, 2022

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'Cup and Handle' Pattern Hints for Ethereum Price on Possible Breakout Against Bitcoin

‘Cup and Handle’ Pattern Hints for Ethereum Price on Possible Breakout Against Bitcoin

The original Ethereum token (Ether)ETH(Rebound 40% against Bitcoin)BTC) after hitting a local low of 0.049 on June 13. Now, the ETH/BTC pair has reached a two-month high and could extend its rally in the coming weeks, according to a classic technical pattern.

ETH draws cup and handle pattern

Specifically, ETH/BTC was forming “cup and handleOn his lower time frame charts since July 18th.

The cup and handle setup usually shows up when the price drops and then bounces back in what appears to be a U-shaped rebound, which looks like a “cup.” In the meantime, the recovery leads to a pullback movement, as price trends fall within a descending channel called the ‘handle’.

The pattern improves after the price rises to a volume roughly equal to the previous low. The chart below for ETH/BTC shows 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 continue to recover towards the neckline resistance near 0.071 BTC. Next, a decisive cup and a break above the neckline could push ETH/BTC to 0.072, 12.75% higher than today’s price.

The success rate of the cup and handle pattern in hitting the profit target is 61%, according to Veteran Investor Tom Bolkowski.

merging factor

The bullish setup for ETH/BTC is also taking cues from the Ethereum network’s transition from Proof of Work (PoW) to possible Proof of Stake (PoS) via “merging” scheduled for mid-September.

Related: Will hypium continue to be incorporated into Ethereum, or is it a bull trap?

Meanwhile, market analyst Michael van de Poppe said Says That Ether could see further upside against Bitcoin due to the consolidation hype with momentum building in the coming weeks.

Van de Poppe expects ETH/BTC to test 0.072, cup and handle profit target, as temporary resistance while holding 0.0645 or 0.057 as support.

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ETH/BTC weekly price chart. Source: TradingView / Michaël van de Poppe

On the contrary, the range of risks for Ethereum with the Merge update includes the possibility of Technical problemOr delays or even a controversial hard fork. For example, error has split The Ethereum chain during the 2020 network upgrade.

The opinions 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.