Ethereum price surpasses $3,100: Mega wedge breakout imminent
After a year and a half of prolonged weakness against the price of Bitcoin, the price of Ethereum is currently showing strength again and could see an explosive move, according to several prominent analysts.
Ethereum/BTC chart is ‘amazing’
Renowned financial expert Raoul Pal uncovered an attractive double chart pattern in his analysis of the ETH/BTC trading pair. The formation of a “mega wedge” and an internal descending channel is setting the stage for what could be a significant breakout for Ethereum when priced by Bitcoin. Pal said:
The ETH/BTC charts are truly amazing…and ready for the next big move, the collapse of the mega wedge…let’s see how it goes…
The “Mega Wedge” pattern discernible on the weekly ETH/BTC chart shows a contraction of price action between two converging trend lines over a longer period of time. The upper trend line, which acts as dynamic resistance, has repeatedly pushed prices higher. Conversely, the lower trend line provided a solid base of support.
A more direct descending channel formed within the boundaries of this year-and-a-half wedge. Characterized by a downward trajectory where price action creates lower highs and lower lows, this channel represents bearish sentiment within the overall sideways phase of the mega wedge.
However, Ethereum’s current position slightly above the upper border of this descending channel means a breakout (if confirmed) could be on the cards. At press time, Ethereum is trading at a value of over $3,059, which is roughly equivalent to 0.06037 BTC.
The intersection of these two patterns, especially if a breakout is confirmed in a descending channel, could signal increased volatility and a possible trend reversal of ETH against BTC. A potential retest of the channel could spur a rebound towards the upper trendline of the mega wedge, possibly challenging the longer-term resistance line. This could lead to a successful breakout of the mega wedge, signaling a massive bullish phase for Ethereum against Bitcoin.
More Bullish Voices for ETH
Surprisingly, Raoul Pal is not the only seasoned analyst observing this key trend. Christopher Inks, founder of Texas West Capital, said via
The monthly ETH/BTC chart is showing an insanely bullish trend off the lows. Bullish SFP, extended volume from lows rallies into bearish resistance. An impulsive break above descending resistance will find the price targeting the upper end of the range and a new ATH.
Renowned analyst Will Clemente also weigh Raoul Pal explains the unfolding situation with expert commentary that reflects the significance of the patterns observed. Clemente highlights the break of a multi-year downtrend on the weekly chart, a technical milestone that carries significant weight on market sentiment.
Clemente’s analysis deepens the plot further by highlighting some of the key factors currently at play in the Ethereum ecosystem. First, Ethereum’s price action swept back to the May 2022 lows. This is a move that often involves waving a weak hand before a potential trend reversal occurs.
Second, recent stories of “Ethereum obituaries” on social media timelines hint at the extreme emotions commonly seen at major turning points. Moreover, a new story about the formation of ETH is currently emerging. This is the emergence of “restaking.”
Perhaps the strongest catalyst for ETH prices in the coming months could be the potential approval of a spot Ethereum ETF in the US. Similar to the Bitcoin ETF euphoria, Clemente speculates that approval has not yet been priced in.
Lastly, Uniswap’s governance proposal to convert fees could return significant value to token holders, potentially adding further strength to ETH’s valuation. Clemente concludes his commentary with a prediction that echoes the sentiments of many observers. “ETH and ETH shitcoin replacement is probably up to us.”
At press time, ETH was trading at $3,059.
Featured image created with DALL·E, TradingView.com chart
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