Has Ethereum finally bottomed vs. Bitcoin? ETH price technicals hint at gains
Ethereum’s native token, Ether (ETH), is well-positioned for gains versus Bitcoin (BTC) in the coming weeks, based on favorable ETH/BTC technicals and bullish divergences.
ETH/BTC nears falling wedge breakout
One of the main reasons behind a potential ETH/BTC rally is its prevailing falling wedge pattern.
A falling wedge is a classic bullish reversal pattern that forms when the price creates lower highs and higher lows with two converging trendlines. It’s resolved after the price breaks above the upper trendline and rises to a level at a length equal to the maximum distance between the upper and lower trendlines.
As of Dec. 22, ETH/BTC is trending inside a similar pattern, eyeing a break above its upper trendline. Depending on the breakout point, the pair could rise toward the 0.056–0.059 BTC area by New Year’s, up 6–13% from current price levels.
However, veteran trader Peter Brandt disagrees, arguing that the aforementioned falling wedge pattern could be a descending triangle, a bearish indicator. Descending triangles are considered bearish continuation patterns in downtrends, which ETH/BTC has been in for the past 15 months.
So Brandt suggests that a break below the falling wedge’s lower trendline could push the ETH/BTC pair down toward 0.044 BTC, down 8.5% from current price levels.
Bullish divergence on weekly chart
Longer-time fram charts, however, suggest the possibility of a rebound by New Year’s and during the first quarter of 2024.
For instance, Ether’s price is forming lower highs while its relative strength index (RSI) is making higher lows on the weekly chart, indicating bullish divergence. This discrepancy suggests that the downward momentum is weakening, and a potential reversal to the upside may be imminent.
What’s more, the price also treads near a support confluence comprising a multiyear ascending trendline and the 0.048–0.052 BTC area.
Related: Does Bitcoin's dominance drop hint at full-blown altcoin season?
This confluence limits ETH/BTC’s downside prospects in the coming weeks, enabling a rebound toward the 200-week EMA (the blue wave) near 0.057 BTC by New Year’s — also the falling wedge target mentioned above.
Conversely, the bears will try to pull the ETH price down below the support confluence, which will risk crashing it to 0.036 BTC, a historically significant resistance level between August 2018 and September 2020.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
