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.
ETH/BTC daily chart with a breakout “rising wedge” pattern. Source: Trade View
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.
Also read: Decentralized finance faces multiple hurdles to mainstream adoption
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.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Cointelegraph.com. All investment and trading moves involve risk, you should do your own research when making a decision.
