Ether (ETH), the native toke of Ethereum, continues its uptrend against Bitcoin (BTC) as the euphoria surrounding the upcoming network upgrade, “the Merge” grows.
ETH at multi-month high against BTC
On the daily chart, ETH/BTC rose to an intraday high of 0.075 on August 6, after moving upwards of 1.5%. Meanwhile, the pair’s gains came as part of a broader rebound trend that started at 0.049 a month ago, representing a gain of around 50%.
The ETH/BTC recovery has partially surfaced thanks to the Merge, which will see Ethereum switch from proof-of-work (PoW) mining to proof-of-stake (PoS).
Ethereum’s “Rising Wedge” Suggests Selling
From a technical perspective, Ether is staring at potential intermediate losses as ETH/BTC paints a convincing bullish wedge.
Rising wedges are bearish reversal patterns that occur when price trends are higher within a range defined by two rising, converging trendlines. As a rule, they resolve after the price has fallen below the lower trendline by as much as the maximum height of the structure.
In addition, a declining volume and relative strength index (RSI) against a rising ETH/BTC further amplifies bearish divergence risks. This gives weight to the wedge’s bearish setup for a target of 0.064 BTC, or an 11% drop from the current price.
Ether looks stronger than the dollar
Meanwhile, technical data paints a brighter picture for Ethereum against the US dollar. The potential of a 10% breakout for ETH/USD looks strong in August due to a classic bullish reversal pattern.
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On a four hour chart, ETH/USD has formed a ‘double bottom’. This pattern resembles the letter “W” due to two consecutive lows followed by a change of direction from downtrend to uptrend, as illustrated below.
Meanwhile, a double bottom pattern dissolves after the price breaks above the common resistance level and – as a rule of technical analysis – rises by as much as the distance between the first bottom and the resistance.
As a result, ETH could rise to $1,940 in August, up 10% from its current price.
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