Ethereum price ‘cup and handle’ pattern hints at potential breakout versus Bitcoin

After hitting 0.049 locally on June 13, Ethereum’s native token Ether has rebounded by 40% against Bitcoin (BTC). The ETH/BTC pair has now reached two-month highs, and could continue its rally in coming weeks according to a classic technical pattern.

ETH paints handle and cup pattern

ETH/BTC is forming a “cup & handle” on its lower timeframe charts since July 18.

A cup-and-handle setup is common when the price falls. Then, it rebounds in what looks like a U-shaped recovery. This looks like a “cup”. The recovery causes a pullback, in which the price trend lower within a downward channel called the handle.

After the price rises to an approximate equal amount to the previous decline, the pattern will resolve. A similar bullish technical setup can be seen in the ETH/BTC chart.

Chart of the four-hour price of ETH/BTC Source: TradingView

The pair trades now lower within the handle range, but could recover towards the neckline resistance at 0.071 BTC. ETH/BTC could then rise to 0.072 if it breaks above the neckline resistance, which would be 12.75% more than today’s price.

According to Tom Bulkowski, a veteran investor, the success rate for the cup and handle patterns in reaching their profit target is 61%.

The Merge factor

The bullish setup of ETH/BTC also draws inspiration from Ethereum’s transition from proof-of work (PoW), to proof-ofstake (PoS), possibly via “the Merge”, which is scheduled for mid September.

Related: Is Ethereum Merge Hopium a Bull Trap?

Market analyst Michael van de Poppe believes that Ether may see greater upside than Bitcoin because of the Merge hype, as momentum builds over the next weeks.

There are only a few levels of $ETH. Resistance at 0.0725 $BTC Support at 0.0645 $BTC and 0.057 $BTC. Expect more momentum to the September merge. pic.twitter.com/QpmkyTwjyb
— Michael van de Poppe (@CryptoMichNL) July 23, 2022

Van de Poppe expects ETH/BTC will test 0.072 (the cup-and-handle profit goal), as interim resistance, while holding either 0.0645 level or 0.057 as support.

Weekly chart of ETH/BTC prices. Source: TradingView/Michael van de Poppe

The Merge update presents a range of risks to Ethereum, including technical issues, delays, or even a hard fork. A bug in the Ethereum blockchain had caused a split during a 2020 network update.

com. You should do your research before making any investment or trading decision.
https://cointelegraph.com/news/ethereum-price-cup-and-handle-pattern-hints-at-potential-breakout-versus-bitcoin

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