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September 8, 2022

Ethereum (ETH) Market Update 09/08

With the ETH/BTC pair hitting annual highs, Ethereum’s native currency Ethereum (ETH) has the potential to register significant gains over Bitcoin (BTC).

The bullish signs are provided by a famous technical pattern known as the inverse head and shoulders, which emerges when the price produces three troughs below a common support level known as the neckline. The central trough, or head, is deeper than the other two, which are referred to as the shoulders.

An inverse head and shoulders setup resolves when the price breaks above the neckline as trading volume increases. According to technical analysis, its profit goal is at length equal to the greatest distance between the lowest point of the head and the neckline.

Ether has drawn a similar pattern so far, and it now awaits a breakthrough over the neckline, as seen in the chart below.

If the price of ETH rises firmly above the neckline, the Ethereum token’s upside goal in 2022 will be about 0.136 BTC, representing a 60% increase from current levels.

The breakthrough might occur prior to Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS).

While supporters of the Merge argue that it is a less energy-intensive alternative to PoW, the upgrade might also cut Ether’s yearly supply by 4.2%.

Furthermore, since the Merge’s release announcement on July 14, demand for ETH as a way of receiving any possible forked tokens has seen the ETH/BTC pair soar by more than 55%.

According to analyst Riteable, Ether has been trading at a resistance level with a lengthy history of strenuous price rises versus Bitcoin. Furthermore, the current increase in ETH/BTC is accompanied by dropping volumes and relative strength index (RSI) values.

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