After a long period of weakness for a year and a half against the price of bitcoin, the price of ethereum is showing strength again and could be preparing for an explosive move, according to several renowned analysts.
In an analysis of the eth/btc trading pair, renowned financial expert Raoul Pal has brought to light a compelling dual chart pattern. The formation of both a “mega wedge” and an internal descending channel is setting the stage for what could be a significant breakout for ethereum when trading against bitcoin. Pal stated:
The eth/btc chart is an absolute stunner… and ready for the next big move, the mega wedge breakout… let's see how it plays out…
<img decoding="async" class="wp-image-576849 size-full" src="https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg" alt="eth/btc price analysis by @RaoulGMI on X” width=”3356″ height=”2380″ srcset=”https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg?w=3356 3356w, https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg?w=460 460w, https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg?w=768 768w, https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg?w=860 860w, https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg?w=1536 1536w, https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg?w=2048 2048w, https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg?w=120 120w, https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg?w=750 750w, https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg?w=1140 1140w, https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Price-Surpasses-3100-Mega-Wedge-Breakout-Is-Imminent.jpg?w=3000 3000w” sizes=”(max-width: 1000px) 100vw, 1000px” loading=”lazy” data-recalc-dims=”1″/>eth/btc Price Analysis by @RaoulGMI on X
The “mega wedge” pattern, discernible on the weekly eth/btc chart, shows a contraction of price movement between two converging trend lines over an extended period of time. The upper trend line, which acts as dynamic resistance, has repeatedly rejected price rally attempts. On the contrary, the lower trend line has provided a solid base of support.
Within the confines of this one-and-a-half-year wedge, a more immediate descending channel has taken shape. This channel, characterized by a downward trajectory with price action reaching lower highs and lower lows, indicates bearish sentiment within the overall mega-wedge consolidation phase.
However, ethereum's current positioning, slightly above the upper boundary of this descending channel, implies that a breakout could be in the cards (if confirmed). At press time, ethereum was trading at an equivalent value of over $3,059, which translates to approximately 0.06037 btc.
The intersection of these two patterns, particularly if the breakout of the descending channel is confirmed, could be a harbinger of increased volatility and a possible trend reversal for eth against btc. A possible retest of the channel could catalyze a rally towards the upper trendline of the mega wedge, challenging long-term resistance. A successful breakout of the mega wedge could then occur, signaling a massive bullish phase for ethereum against bitcoin.
Surprisingly, Raoul Pal is not the only experienced analyst observing this important trend. Christopher Inks, founder of Texas West Capital, stated via X:
The eth/btc monthly chart looks incredibly bullish from the lows. Bullish SFP, volume expansion at lows, rally towards descending resistance. An impulsive break above that descending resistance will have me looking for a price to target the top of the range and probably new ATHs.
Renowned analyst Will Clemente has also heavy on on the unfolding situation with his expert commentary, echoing the importance of the patterns observed by Raoul Pal. Clemente accentuates the break of a multi-year bearish trend on the weekly chart, a technical milestone that carries substantial weight for market sentiment.
Clemente's analysis further deepens the plot by highlighting several key factors currently at play in the ethereum ecosystem. First, ethereum price action has revisited and swept the May 2022 lows, a move often associated with shaking off weak hands ahead of a potential trend reversal.
Second, the recent talk of “ethereum obituaries” on social media timelines suggests extreme sentiment, often seen around major inflection points. Furthermore, there is currently a new narrative for the eth setup: the emergence of the “retake”.
Probably the strongest catalyst for the eth price in the coming months could be the possible approval of an ethereum spot ETF in the United States. Similar to the bitcoin ETF euphoria, Clemente speculates that approval has not yet been priced in.
Lastly, Uniswap's governance proposal to trigger fees could redirect significant value to token holders, which could add further bullish momentum to eth's valuation. Clemente caps off his comment with a forecast that resonates with the sentiments of many observers: “The eth and eth bullshit rotation is probably upon us.”
At the time of this publication, eth was trading at $3,059.
Featured image created with DALL·E, chart from TradingView.com
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