Ethereum’s primary cryptocurrency, Ether (ETH), is showing strong signs of a potential upward trajectory against Bitcoin (BTC), with projections indicating a possible increase of up to 75% before the year concludes. This bullish outlook is supported by the recent formation of a classic technical pattern on Ethereum’s weekly price charts.
Since early September, the ETH/BTC trading pair has been developing an inverse-head-and-shoulders (IH&S) formation. This pattern consists of three distinct troughs, with the central dip being the most pronounced, all aligning beneath a key resistance level at 0.0420 BTC. The implications of this setup are significant, as it sets the stage for a potential breakout if ETH can move above this neckline.
According to technical analysis, an IH&S pattern typically leads to a price increase equal to the maximum height of the pattern itself after the breakout occurs. Applying this traditional rule to the current ETH/BTC chart suggests that the price could reach approximately 0.066 BTC by the end of December, representing a remarkable increase of around 75% from its present valuation.
Further reinforcing this optimistic view, the charts indicate an impending golden cross – a powerful bullish indicator – between the 20-week exponential moving average (EMA) and the 50-week EMA. Such crossovers have historically signified upward momentum; for instance, a similar event occurred in July 2020, which preceded an extraordinary 250% increase in ETH/BTC valuations, notwithstanding a brief period of price correction.
Market observers speculate that a pullback into the support range of 0.033–0.045 BTC could act as a launching pad for a rebound, thereby affirming the IH&S breakout narrative. However, traders should be mindful of significant resistance levels that ETH will need to overcome to confirm a sustained bull run.
One of the initial barriers is the 200-week EMA, situated around 0.045 BTC. This level has proven to be a formidable point of rejection for ETH/BTC over the past two years. Surpassing this resistance could lead to an attempt to break through a long-standing downward trendline, which has historically defined Ethereum’s peaks against Bitcoin since 2017. Currently, this trendline is positioned within the 0.050–0.055 BTC range.
Despite the potential hurdles, analysts remain optimistic, suggesting that Ether may exhibit growth in the range of 15-30% relative to Bitcoin throughout the year. With increasing institutional adoption and network upgrades set to enhance Ethereum’s scalability, investors may find the current landscape appealing.
As always, it is crucial for investors to perform thorough research and evaluation before making trading decisions. Cryptocurrency markets are inherently volatile, and involvement carries risks that must be carefully considered.
