Ethereum price rises 50% against Bitcoin in a month, but there is a problem

Ethereum price rises 50% against Bitcoin in a month, but there is a problem

Ether (ETH), the native currency of Ethereum, has continued its uptrend against Bitcoin (BTC) as euphoria builds around its upcoming network upgrade, “the Merge.”

ETH at multi-month highs vs. BTC

On the daily chart, ETH/BTC reached an intraday high of 0.075 on August 6, following a 1.5% bullish move. Meanwhile, the pair’s gains came as part of a broader rebound trend that started a month ago at 0.049, which equates to a 50% gain.

Daily price chart of the ETH/BTC pair. Source: TradingView

The recovery of the ETH/BTC pair is due in part to the merger, which will see Ethereum replace proof-of-work (PoW) mining with proof-of-stake (PoS).

Ethereum “Rising Wedge” Suggests Selling

From a technical perspective, Ether faces potential interim losses as the ETH/BTC pair paints a convincing rising wedge.

Rising wedges are bearish reversal patterns that occur when price tends to rise within a range defined by two converging rising trendlines.. As a rule, they are resolved after the price breaks below the lower trend line to the maximum height of the structure.

Ethereum price rises 50% against Bitcoin in a month, but there is a problem
Daily price chart of the ETH/BTC pair with “rising wedge” breakout setup. Source: TradingView

Also, Declining volume and relative strength index (RSI) against a rising ETH/BTC pair further increase bearish divergence risks. This gives weight to the wedge’s bearish setup for a target of 0.064 BTC, or 11% lower than the current price.

Ether looks stronger against the dollar

Meanwhile, technicals paint a brighter picture for Ethereum against the US Dollar. The potential for a 10% breakout for the ETH/USD pair looks strong in August due to a classic bullish reversal pattern.

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On a four-hour chart, the ETH/USD pair has formed what appears to be a “double bottom.” This pattern resembles the letter “W” due to two consecutive lows followed by a change in direction from downtrend to uptrend, as illustrated below.

Ethereum price rises 50% against Bitcoin in a month, but there is a problem
Four-hour price chart of the ETH/USD pair showing a “double bottom” breakout setup. Source: TradingView

In the meantime, A double bottom pattern resolves after price breaks above its common resistance level and – as a rule of technical analysis – rises by as much as the distance between the first bottom and resistance.

As a result, ETH could rise towards $1,940 in August, 10% higher than the current price.

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