Despite Ethereum’s significant Merge event, a traditional bearish reversal pattern predicts future trouble for the ETH/BTC pair.
Since May 2021, the weekly chart of Ethereum (ETH), the native token of Ethereum, has been creating an inverted cup-and-handle pattern, which suggests a likely collapse against Bitcoin (BTC).
A bearish reversal pattern called an inverse cup-and-handle is marked by decreasing trade volume. It usually ends when the price crosses below its support line, and the decline toward the level is as long as the distance between the peak of the cup and the support line.
Applying the theoretical definition to the weekly chart of ETH/BTC identifies 0.03 BTC as the next negative target, representing a loss of about 55% from the price on September 16. Alternately, the ETH/BTC pair may yet result in significant gains in the years to come.
Ethereum Bears Catch Charging Bulls By The Horns Post Merger?
Since January 2018, the ETH/BTC pair has depicted a probable cup-and-handle pattern on the weekly log chart. In other words, a rise of more than 520% from the current price levels, or toward 0.5 BTC in 2023, is possible.
Contrary to their inverse counterparts, cup-and-handles are bullish trend patterns with upside goals equal to their greatest height when measured from their breakout point.
Tom Bulkowski, a seasoned analyst, points out that these patterns have a 61% success probability of hitting their upside targets.
For instance, the cup-and-handle pattern that developed on the Dow Jones chart during the 1930s and 1940s Great Depression — where the cup required nine years to build and the grip another 4 years — reached its upside target in the 1950s, as illustrated below.
The resistance level of the pattern, 0.08 BTC, is currently being tested by the pair. It has been bouncing lower inside the handle range, for the time being, looking for a pullback toward its lower trendline at about 0.05 BTC after trying the upper one as resistance this week.
