Compared to Bitcoin: Has Ethereum finally hit bottom?

Ethereum is forming a rising wedge pattern on the daily chart against Bitcoin, raising the possibility of a new year breakout.

Ether, the native token of Ethereum

Ethereum

$2,343

In a favorable position relative to Bitcoin

Bitcoin

$43,669

In the coming weeks, based on favorable ETH /BTC technicals and bullish divergence.  

ETH/BTC nears falling wedge breakout

What’s behind the potential rise in ETH/BTC One of the main reasons is its prevalent falling wedge pattern.

The falling wedge is a classic bullish reversal pattern when price creates lower highs and higher lows across two converging trend lines form. The problem is solved when the price breaks the upper trendline and rises to a level equal to the maximum distance between the upper and lower trendlines.

As of December 22, ETH/BTC is trending similarly and is expected to break above the upper trendline. Depending on the breakout, the pair could rise to the 0.056-0.059 BTC area before the New Year, representing a 6-13% upside from current price levels.

However, veteran trader Peter Brandt disagrees, arguing that the above The falling wedge pattern may be a descending triangle and is a bearish indicator. Descending triangles are considered a bearish continuation pattern in a downtrend, and ETH/BTC has been in this shape for the past 15 months.

Thus Brandt believes that a break below the lower trendline of the descending wedge could push ETH/BTC The pair is pushing towards 0.044 BTC, down 8.5% from current price levels.

Bullish divergence on the weekly chart

However, the longer time frame chart suggests , a rebound is likely in the New Year and the first quarter of 2024.

For example, on the weekly chart, the price of Ethereum is forming lower highs, while its relative strength index (RSI) is forming higher of lows, which indicates bullish divergence. This divergence suggests that downward momentum is waning and the upward trend may be about to reverse.

More importantly, the price is also close to support consisting of the multi-year ascending trendline and the 0.048-0.052 BTC area meeting point.

Related: Does Bitcoin’s Declining Dominance Signal Altcoin Season Is Coming?

This confluence limits the downside prospects for ETH/BTC in the coming weeks, allowing it to rebound to close to 0.057 BTC before the new year. 200 Week EMA (Blue Wave) – This is also the falling wedge target mentioned above.

Conversely, the bears will try to pull the ETH price below the support confluence, which will risk sending its price down to 0.036 BTC, which is 2018 Historically important resistance levels between August and September 2020.