Ethereum is up 50% this year on Bitcoin – Fractal Analysis.
Ethereum's native token Ether (ETH) could explode by more than 50% in the coming months against its arch-rival Bitcoin (BTC) in a so-called opposite-head-and-shoulders (IH&S) technical setup. .
The ETH/BTC split setup equates to a 140% rise in 2021.
In particular, the IH&S pattern is distinguished by the formation of three troughs below the common neckline protector: the middle trough (head) is slightly deeper than the other two troughs (shoulders).
In a “perfect” scenario, the IH&S pattern resolves when the price breaks above the neckline resistance after the formation of the right shoulder. When you do this, the value increases compared to the distance between the lowest point of the head and the highest point of the neck barrier.
Since June 17, the ETH/BTC pair has seen an IH&S pattern after forming what appears to be a core. Therefore, it still expects an extended run to the common neckline resistance level around 0.061 BTC.
After that, the pair may experience a minor pullback and recovery to retest the neckline, thereby completing the IH&S pattern formation.
Overall, a successful breakout above the neckline – coupled with increased trading volumes – will bring ETH/BTC's bullish target to around $0.084 by the end of the year, which is more than 50% above the current price level.
Analyst Wolf expects an uptick in IH&S breakdowns in the coming months due to similarities with the larger IH&S breakdown pattern over the 2019–2021 period. The latter resulted in a 140% price increase following a significant divergence in April 2021.
Bitcoin halving increases ETH/BTC opportunities
ETH/BTC's bullish outlook for 2024 has gained further momentum from the historic post-Bitcoin price halving feature.
For example, the pair surged more than 330% following the third bitcoin halving in May 2020 and more than 900% following the second bitcoin halving in July 2016.
ETH/BTC strengthened sideways from the fourth half of Bitcoin in April 2024, holding the lower trend line of the triangle and looking towards the upper transition line at around 0.062 BTC, which is about 20% higher than the current price level.
Related: Traders: Ethereum Is ‘Most Bullish Altcoin' As ETH Returns $3.5K
Interestingly, as mentioned above, the upside target matches the IH&S neckline resistance. In this way, swings in the triangle region allow ETH/BTC to complete the IH&S formation, leading to an eventual technical breakdown if the pattern is as intended.
From a fundamental perspective, the launch of spot ether exchange-traded funds (ETFs) — possibly as early as July 2, according to Bloomberg analysts — could trigger the technical breakouts discussed above.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
