Ether (ETH), the native token of Ethereum, continued its upward trend against Bitcoin (BTC), as euphoria grows around the upcoming network upgrade, “The Merge”.
There were multi-month highs against BTC
On the daily chart, the ETH/BTC pair rose to an intraday high of 0.075 on August 6, after rising 1.5%. Meanwhile, the pair’s gains came as part of a broader rebound trend that started a month ago at 0.049, representing gains of around 50%.
The recovery of the ETH/BTC pair is partly due to the Merger, which will allow Ethereum to move from proof-of-work (PoW) mining to proof-of-stake (PoS).
Ethereum ‘Rising Wedge’ Suggests Selling
From a technical point of view, Ether is at risk of taking intermediate losses as the ETH/BTC pair shows a strong rising wedge.
Ascending Wedges are bearish reversal patterns that occur when price tends to rise within a range defined by two converging and rising trend lines. Usually, they resolve after a price breakout of the lower trend below a height equal to the maximum height of the structure.
In addition, a decrease in volume and relative strength index (RSI) in the face of a rise in the ETH/BTC pair increases the risks of a bearish divergence. This gives weight to the bearish wedge setup at a target of 0.064 BTC, an 11% drop from today’s price.
Ether looks stronger against the dollar
Meanwhile, technical data shows a more positive picture of #Ethereum against the US Dollar. The potential for a 10% breakout for ETH/USD looks strong in August due to a classic bullish reversal pattern.
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On a four-hour chart, the ETH/USD pair has formed a “double bottom”. This pattern resembles the letter “W” due to two consecutive lows followed by a change in direction from the reverse to the uptrend as shown below.
Meanwhile, a double bottom pattern resolves after the price breaks above its joint resistance level and—as a rule of technical analysis—increases the distance between the first bottom and resistance.
As a result, ETH could rally towards $1,940 in August, up 10% from today’s price.
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