Ethereum’s native token Ether (ETH) has rebounded 40% towards Bitcoin (BTC) after bottoming out regionally at 0.049 on June 13. Now, the ETH/BTC pair is at two-month highs and might prolong its rally within the coming weeks, in line with a traditional technical sample.

ETH paints cup and deal with sample

Particularly, ETH/BTC has been forming a “cup and handle” on its lower-timeframe charts since July 18. 

A cup and deal with setup sometimes seems when the worth falls after which rebounds in what seems to be a U-shaped restoration, which appears to be like like a “cup.” In the meantime, the restoration results in a pullback transfer, whereby the worth developments decrease inside a descending channel known as the “deal with.”

The sample resolves after the worth rallies to an roughly equal dimension to the prior decline. The ETH/BTC chart under illustrates an identical bullish technical setup.

ETH/BTC four-hour worth chart. Supply: TradingView

Notably, the pair now trades decrease contained in the deal with vary however might pursue a restoration towards the neckline resistance close to 0.071 BTC. Afterward, a decisive cup and deal with breakout above the neckline degree could lead on ETH/BTC to 0.072, up 12.75% from immediately’s worth.

The success charge of the cup and deal with sample in reaching its revenue goal is 61%, according to veteran investor Tom Bulkowski. 

The Merge issue

The bullish setup for ETH/BTC additionally takes cues from Ethereum’s community transition from proof-of-work (PoW) to proof-of-stake (PoS) doubtlessly by way of “the Merge” slated for mid September.

Associated: Will Ethereum Merge hopium continue, or is it a bull trap?

In the meantime, market analyst Michaël van de Poppe says that Ether might see extra upside versus Bitcoin because of the Merge hype as momentum builds within the coming weeks. 

Van de Poppe anticipates ETH/BTC to check 0.072, the cup-and-handle revenue goal, as interim resistance whereas holding both 0.0645 or 0.057 degree as help.

ETH/BTC weekly worth chart. Supply: TradingView/Michaël van de Poppe

Conversely, the vary of dangers for Ethereum with the Merge replace embody potential technical issues, delays or perhaps a contentious laborious fork. As an example, a bug had split the Ethereum chain throughout a 2020 community improve.

The views and opinions expressed listed below are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer includes danger, you must conduct your individual analysis when making a call.