- Ethereum has printed a classic bullish reversal pattern against Bitcoin in the weeks leading up to the Merge.
- Exchange reserves of Ethereum have hit a four-month low, indicating that the community is preparing to transition to Proof-of-Stake.
- Analysts have predicted a retest of $2,000 in Ethereum’s current uptrend if Bitcoin cooperates with the market sentiment.
Analysts have observed a cup-and-handle formation in the ETH-BTC price chart ahead of the transition to the Proof-of-Stake consensus mechanism. Ethereum has bullish potential to run up to $2,000 in the current uptrend.
Bullish chart pattern in ETH/BTC indicates breakout is imminent
After hitting a local bottom on June 13, 2022, Ethereum price recouped its losses and rebounded 40%. The ETH/BTC pair has hit its two-month high and analysts have observed a classic bullish pattern in the chart that predicts an extended rally.
Yashu Gola, a leading crypto analyst, notes the formation of a cup and handle on the lower-timeframe ETH/BTC chart since last week. A cup and handle pattern appears when an asset’s price plummets and rebounds in a U-shaped recovery, similar to a cup. When the asset’s price trends lower inside a descending channel, it is called a handle.
Once ETH/BTC pair recoups its losses and hits the same level as it held prior to the decline, the pattern is resolved.
ETH-BTC price chart
Tom Bulkowski, a veteran investor, argues that the cup and handle pattern has a 61% success rate in reaching its profit target. Interestingly, the formation of the cup and handle pattern in the ETH/BTC chart was accompanied by a drop in ETH reserves across exchanges, another indicator of a rally in the altcoin.
Ethereum exchange reserves hit four year low
Based on data from the crypto intelligence platform Glassnode, Ethereum balance across exchanges hit a four-year low. The total ETH held across exchanges remained under 20 million as of July 22.
Ethereum balance across exchanges
The last time Ethereum balances across exchanges hit this level was in July 2018, it was 19.93 million. Investors are likely pulling ETH out of exchanges, in anticipation of the Merge, The transition from Proof-of-Work to Proof-of-Stake is a key event in Ethereum’s journey to lower transaction costs and higher scalability.
Vitalik Buterin, the co-founder of Ethereum has mentioned the likelihood of 100,000 transactions per second after the Merge.
Analysts predict run up to $2,000 in Ethereum price rally
FXStreet analysts have evaluated the Ethereum price trend and predicted a retest of the $2,000 level. ETH/BTC price chart revealed a bullish pattern and analysts believe a breakout in the altcoin is likely. For price levels and key chart patterns, check the video below:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.