Following a crucial week for Ethereum, a technical candlestick arrangement indicates that ETH prices could be gearing up for a significant uptrend in the near future. An analyst points out events in the monthly chart, highlighting the reversal of the ETH/BTC ratio from a multi-year support trend line. Historically, when prices bounce off this line, altcoin prices tend to trend higher. The ETH/BTC ratio is closely monitored by technical analysts as it compares the performance of the top two cryptocurrencies. Despite Bitcoin’s strength over the past couple of years, the monthly chart reveals a descending channel, suggesting an upward trend with a series of higher lows. This signifies that the bulls have been absorbing selling pressure, maintaining higher prices.
Potential Bullish Reversal
Analyzing the monthly chart further, it is anticipated that this month’s bar will close as a bullish signal, forming a double-bar bullish reversal pattern that could spur demand. While the current trading volume is relatively lower compared to July 2022, a bullish bar in June confirming the month’s gain might trigger another leg up. This scenario could mirror the rally seen in January 2021, potentially leading to a 40% gain against Bitcoin and pushing ETH prices above 0.08 BTC, approaching 2017 highs.
Bitcoin vs. Ethereum Performance
Bitcoin has been dominant since September 2022, outperforming Ethereum and erasing gains from the previous years. This led to a descending channel, although participation levels during this phase of lower lows were also relatively low. Despite this, a close above 0.08 BTC would demonstrate strong bullish sentiment for ETH and could help solidify its position, potentially reducing Bitcoin’s dominance in the market. The approval of spot Ethereum ETFs by the United States SEC represents a significant development, boosting the network and the platform. The fact that ETH prices surged by 30% following this approval indicates a positive outlook for Ethereum in the coming weeks.
The technical analysis suggests that Ethereum prices could be on the verge of a sharp uptrend, supported by the bullish indicators in the monthly chart and the potential for increased demand. While Bitcoin has been dominant in recent months, the approval of spot Ethereum ETFs signals a possible shift in the market dynamics, with ETH outperforming BTC. As the crypto market continues to evolve, it will be interesting to see how Ethereum’s price trajectory unfolds in the months ahead.