Ethereum’s native token, Ether (ETH), is well-positioned for positive factors versus Bitcoin (BTC) within the coming weeks, primarily based on favorable ETH/BTC technicals and bullish divergences.
ETH/BTC nears falling wedge breakout
One of many predominant causes behind a possible ETH/BTC rally is its prevailing falling wedge sample.
A falling wedge is a traditional bullish reversal sample that types when the worth creates decrease highs and better lows with two converging trendlines. It’s resolved after the worth breaks above the higher trendline and rises to a stage at a size equal to the utmost distance between the higher and decrease trendlines.
As of Dec. 22, ETH/BTC is trending inside an identical sample, eyeing a break above its higher trendline. Relying on the breakout level, the pair might rise towards the 0.056–0.059 BTC space by New 12 months’s, up 6–13% from present value ranges.
Nonetheless, veteran dealer Peter Brandt disagrees, arguing that the aforementioned falling wedge sample may very well be a descending triangle, a bearish indicator. Descending triangles are thought of bearish continuation patterns in downtrends, which ETH/BTC has been in for the previous 15 months.
So Brandt suggests {that a} break under the falling wedge’s decrease trendline might push the ETH/BTC pair down towards 0.044 BTC, down 8.5% from present value ranges.
Bullish divergence on weekly chart
Longer-time fram charts, nevertheless, counsel the potential of a rebound by New 12 months’s and through the first quarter of 2024.
For example, Ether’s value is forming decrease highs whereas its relative energy index (RSI) is making greater lows on the weekly chart, indicating bullish divergence. This discrepancy means that the downward momentum is weakening, and a possible reversal to the upside could also be imminent.
What’s extra, the worth additionally treads close to a help confluence comprising a multiyear ascending trendline and the 0.048–0.052 BTC space.
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This confluence limits ETH/BTC’s draw back prospects within the coming weeks, enabling a rebound towards the 200-week EMA (the blue wave) close to 0.057 BTC by New 12 months’s — additionally the falling wedge goal talked about above.
Conversely, the bears will attempt to pull the ETH value down under the help confluence, which is able to danger crashing it to 0.036 BTC, a traditionally important resistance stage between August 2018 and September 2020.
This text doesn’t include funding recommendation or suggestions. Each funding and buying and selling transfer includes danger, and readers ought to conduct their very own analysis when making a call.
