Ethereum’s Bullish Prospects: A Look at Ether’s Potential vs. Bitcoin
Ethereum’s native token, Ether (ETH), is generating buzz with forecasts suggesting it could soar 75% against Bitcoin (BTC) by the New Year. This optimistic prediction is rooted in a bullish reversal setup observed on its weekly price charts, indicating a potentially transformative period for Ether.
Multiple Signals Hint at Higher ETH Prices
The ETH/BTC trading pair has been crafting what traders term an inverse-head-and-shoulders (IH&S) pattern since early September. This classic formation features three troughs, with the deepest occurring in the middle, all occurring beneath a common neckline resistance at 0.0420 BTC.
Source: TradingView
Typically, a breakout from an IH&S setup is confirmed when the price crosses above the neckline. The expectation is that the price will then rise by an amount equivalent to the pattern’s maximum height. If we apply this strategy to the current ETH/BTC chart, the upside target for the end of the year sits around 0.066 BTC, marking a striking 75% increase from current levels.
Another compelling signal comes from the imminent formation of a golden cross between Ethereum’s 20-week exponential moving average (20-week EMA) and its 50-week EMA. A golden cross occurs when a shorter-term moving average crosses above a longer-term one, often seen as a bullish sign.
Source: TradingView
This pattern was notably present in July 2020 when a similar crossover led to an impressive 250% surge in ETH/BTC rates, albeit following a minor overbought correction. A brief dip into the 0.033–0.045 BTC support zone, which aligns with both the 20- and 50-week EMAs, could provide a springboard for another recovery, thereby confirming the IH&S breakout scenario.
Major ETH/BTC Resistances to Watch
While the bullish outlook is promising, ETH/BTC faces several critical resistance levels that must be navigated before a full breakout can be confirmed. One of the primary hurdles is the 200-week EMA (illustrated by the blue line) sitting around 0.045 BTC. This level has historically acted as a barrier, rejecting several attempts at upward movement over the past two years.
Source: TradingView
Should ETH/BTC manage to breach the 200-week EMA, it may set its sights on an even more significant obstacle: a long-term downward trendline that has characterized Ether’s peaks against Bitcoin since 2017. The trajectory of this trendline is currently in the 0.050–0.055 BTC range, marking a critical point of interest for traders.
While external forecasts, such as those from market analyst Tom Lee, suggest that both Bitcoin and Ether could experience a "monster move" in the upcoming months, it is essential to remember that Ether still holds a 15%–30% growth potential compared to Bitcoin this year.
In this intricate landscape of cryptocurrency trading, Ether’s path against Bitcoin reflects broader market dynamics and trading psychology. As the year draws to a close, analysts will be keenly watching how these patterns unfold and whether the bullish indicators lead to significant price movements for Ether.
