Ethereum’s native token Ether (ETH) looks poised to strengthen against the US dollar and Bitcoin (BTC) in the days leading up to its transition to proof-of-stake in September.
Bullish ETH price chart setup
Bullish outlook stems from classic technical indicators on ETH/USD and ETH/BTC charts. For example, the ETH/USD pair has been forming a “falling wedge” pattern with a profit target sitting around 30% above current prices.
Meanwhile, the chart for the ETH/BTC pair is painting a potential “bull flag” that could increase the price by about 10% from current price levels upon resolution.
This is how these bullish setups could play out.
Ethereum at $2,000 next?
Falling wedges are formed when the price tends to go lower within a descending and contracting channel.
They normally resolve after the price breaks above its upper trend lines. Your breakout target is as high as the maximum distance between your upper and lower trendlines when measured from the breakout point
The price of ETH has been falling since mid-August in a falling wedge pattern. It recently rallied after testing the lower trend line of the structure to reach the upper trend line and is now looking for a break towards or above $2,000 as shown below.
The wedge’s profit objective coincides with Ethereum’s 200-day exponential moving average (200-day EMA – the blue wave) at $2,055.
Also, the target appears to be a crossover as ETH looks for an extended bull run towards $2,500. This level is the upside target of a broader ascending channel (the purple range) that has been forming since June.
In other words, the price of ETH could grow by 30%-55% in September.
ETH/BTC bullish flag setup
Bullish flags appear when the price consolidates lower within a descending parallel channel after a strong move higher.
The pattern resolves after price breaks above its upper trend line, followed by an extended move up towards the level by a length equal to the size of the previous uptrend, also called flagpole. For this reason, analysts call bull flags “bullish continuation” patterns.
Ether has been forming a bullish flag against Bitcoin since early August, waiting for it to break down by testing the upper trend line of the structure for one. If this happens, the price could rise towards 0.087 BTC, about 10% from the price of August 3.
Alternatively, the ETH/BTC pair could turn lower to retest the lower flag trend line. This trend line appears to coincide with a confluence of support consisting of the 50 day EMA (the red wave) and the 0.618 Fib line at 0.0729 BTC.
The pullback will not invalidate the bull flag breakout setup unless the price breaks below the lower trendline. But if it does, the ETH/BTC pair risks falling towards 0.088 BTC, a level in sync with the 0.5 Fib line and the 200 day EMA (the blue wave).
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and commercial movement implies a risk, you must carry out your own investigation when making a decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.