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Ethereum price rises 50% against Bitcoin in a month – but there’s a catch

Ether (ETH), Ethereum’s native token, continues its uptrend against Bitcoin (BTC) on euphoria over its upcoming network upgrade, “The Merger.”

ETH at multi-month highs against BTC

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

ETH/BTC Daily Price Chart. Source: TradingView

The ETH/BTC recovery has emerged in part due to the merger, which switches Ethereum from proof-of-work (PoW) mining to proof-of-stake (PoS).

Ethereum’s “rising wedge” indicates selling

From a technical perspective, Ether sees potential interim losses as it paints a convincing bullish wedge for ETH/BTC.

Rising wedges are bearish reversal patterns that occur when price trends within a range defined by two rising, converging trendlines. As a rule, they resolve after the price breaks through the maximum height of the formation below the lower trendline.

The ETH/BTC daily price chart features a “Rising Wedge” breakdown setup. Source: TradingView

Moreover, falling volume and relative strength index (RSI) against rising ETH/BTC increase the risks of further bearish divergence. This gives weight to Wedge’s bearish setup for a target of 0.064 BTC, or 11% below today’s price.

Ether looks strong against the dollar

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

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

ETH/USD four-hour price chart featuring a “double bottom” breakout setup. Source: TradingView

Meanwhile, the double bottom pattern resolves after the price breaks above its normal resistance level and as a rule of technical analysis—the distance between the first bottom and the resistance increases.

As a result, ETH could rally towards $1,940 in August, up 10% from today’s price.

The views and opinions expressed herein do not reflect the views of the authors and Cointelegraph.com. As every investment and trading move involves risk, you should conduct your own research when making a decision.