Weeks before the Merge launch date, Ether printed a bullish reversal pattern for Bitcoin.
After hitting 0.049 locally on June 13, Ethereum’s native token Ether has rebounded 40% against Bitcoin BTC. The ETH/BTC pair has reached two-month highs, and could continue its rally in coming weeks, according a classic technical pattern.
ETH paints handle and cup pattern
ETH/BTC have been forming a Cup and handling in their lower-timeframe charts starting July 18.
A cup-and-handle setup is common when the price falls. Then, it rebounds in what looks like a U-shaped recovery. This looks almost like a cup. The recovery causes a pullback, in which the price trend lower within a downward channel called the handle.
After the price rises to an approximate equal amount to the previous decline, the pattern will resolve. A similar bullish technical setup can be seen in the ETH/BTC chart.
The pair trades now lower within the handle range, but could recover towards the neckline resistance at 0.071 BTC. A decisive cup breakout and handle breakout above this level could take ETH/BTC up to 0.072, an increase of 12.75% over Saturday’s price.
The success rate of the cup and handle pattern in reaching its profit target is 61%, has potential technical issues and delays, as well as a contentious hardfork. A bug , for instance, had caused the Ethereum chain to be split during a 2020 network update.
