Ethereum’s native token, Ethereum (ETH), is likely to skyrocket by more than 50% against its top rival, Bitcoin (BTC), in the coming months, according to a technical setup called Inverse Head and Shoulders (IH&S). .
The ETH/BTC breakout setup is similar to the 140% surge in 2021.
In particular, the IH&S pattern is characterized by the formation of three lows below a common neckline resistance line. This means that the middle trough (at the head) is deeper than the other two troughs (at the shoulders) of approximately the same length.
In a “perfect” scenario, the IH&S pattern resolves when the price breaks above the neckline resistance after the right shoulder is formed. In this case, the price rises by the maximum distance between the lowest point of the head and the neckline resistance line.
As of June 17, the ETH/BTC pair seesawed after forming what appears to be the front of the IH&S pattern. Therefore, we still await an extended rally towards the common neckline resistance level of around 0.061 BTC.
Afterwards, the pair may decline gently and recover to retest the neckline, completing the IH&S pattern formation.
Overall, a successful break above the neckline along with increased volume would place the upside target for ETH/BTC at around $0.084 by the end of the year, more than 50% above current price levels.
Analyst Wolf predicts an IH&S breakout scenario in the coming months due to its similarity to the massive IH&S breakout pattern of the 2019-2021 period. The latter led to a 140% price surge following a decisive breakout in April 2021.
Bitcoin Halving Fractal Increases ETH/BTC Opportunities.
ETH/BTC’s bullish outlook for 2024 gains additional momentum through historical price action following the Bitcoin halving.
For example, the pair soared more than 330% after the third Bitcoin halving in May 2020 and bounced more than 900% after the second Bitcoin halving in July 2016. In both cases it remained within the large triangle pattern, as shown below.
ETH/BTC has been trading sideways since the fourth Bitcoin halving in April 2024, holding the lower trendline of the triangle range while eyeing a rebound towards the upper trendline at around 0.062 BTC, up about 20% from current price levels. .
Related: Traders: Ethereum Is ‘The Most Bullish Altcoin’ As ETH Reclaims $3.5K
Interestingly, the upside target is aligned with the IH&S neckline resistance as mentioned above. Therefore, a move within the triangle could allow ETH/BTC to complete an IH&S formation, which could eventually lead to a technical breakout if the pattern plays out as intended.
From a fundamental perspective, the launch of a spot Ether exchange-traded fund (ETF) by July 2 could trigger the technically bullish scenario discussed above, according to Bloomberg analysts.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.