Ether (ETH), Ethereum’s native toke, continues its uptrend against Bitcoin (BTC) as euphoria around the upcoming network upgrade, “the Merge”, grows.
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% upside move. Meanwhile, the pair’s gains came as part of a broader rebound trend that started a month ago at 0.049, which equates to about a 50% gain.
The ETH/BTC recovery has emerged in part due to the merger, 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 temporary losses while ETH/BTC paints a compelling rising wedge.
Rising wedges are bearish reversal patterns that occur when price trends increase within an area defined by two rising, converging trend lines. As a rule, they resolve after the price breaks below the lower trend line by as much as the maximum height of the structure.
Also, a declining volume and relative strength index (RSI) against a rising ETH/BTC further increases the risk of bearish divergence. This adds weight to the wedge’s bearish setup for a target of 0.064 BTC, or down 11% from today’s price.
Ether looks stronger compared to the dollar
Meanwhile, technicians paint a brighter picture for Ethereum against the US dollar. The potential for 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 what appears to be a “double bottom”. This pattern resembles the letter “W” due to two consecutive lows followed by a change in direction from downtrend to uptrend, as illustrated below.
Meanwhile, a double bottom pattern resolves after the price breaks above the usual 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 towards $1,940 in August, up 10% from today’s price.
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