Ethereum (ETH), Ethereum’s native token, continues its uptrend against Bitcoin (BTC) as euphoria grows around the upcoming Merge network upgrade.
ETH at multi-month highs against BTC
On the daily chart, ETH/BTC surged to an intraday high of 0.075 on August 6 after rising 1.5%. Meanwhile, the pair’s rise was part of a broader recovery trend that started a month ago at 0.049, representing about a 50% gain.
The recovery of ETH/BTC is partly due to the merger that will see Ethereum switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS) mining.
Rising wedge Ethereum suggests a sell-off
From a technical standpoint, Ether is looking at potential intermediate losses as ETH/BTC draws a convincing rising wedge.
Rising wedges are bearish reversal patterns that occur when the price moves up within the range defined by two ascending converging trend lines. They are usually resolved after the price breaks below the lower trend line to the maximum height of the structure.
Moreover, the decline in volume and relative strength index (RSI) against the background of the growth of ETH/BTC further increases the risks of bearish divergence. This lends weight to the bearish wedge with a target of 0.064 BTC, or 11% below today’s price.
Ether Looks Stronger Against Dollar
Meanwhile, the technical data paints a brighter picture for Ethereum against the US dollar. ETH/USD 10% breakout potential looks strong in August due to a classic bullish reversal pattern.
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On the 4-hour chart, ETH/USD has formed what appears to be a “double bottom”. This pattern resembles the letter “W” due to two consecutive lows followed by a change in direction from a downtrend to an uptrend, as shown below.
Meanwhile, the double bottom pattern is resolved after the price breaks its general resistance level and, as a rule of technical analysis, rises by a distance equal to the distance between the first bottom and the resistance.
As a result, ETH could rise to $1,940 in August, up 10% from today’s price.
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Credit : cointelegraph.com