Ethereum cryptocurrency, close-up of real coins in front of a price chart
Following a significant week for Ethereum, technical candlestick alignments suggest that ETH price could be poised for a sharp rise in the coming weeks and months.
One analyst pointed to the events on the monthly chart: Note The ETH/BTC ratio is reversing from the multi-year support trendline. The analyst went on to say that typically, when prices bounce off this line, altcoin prices tend to react and trend upwards.
ETH/BTC rises from key support trendline
ETH/BTC is a ratio closely monitored by technical analysts. It compares the performance of the first and second most valuable coins in the world.
Bitcoin has been performing strongly for the better part of the past two years, but the monthly chart clearly shows a descending channel indicating an uptrend.
So far, the move has been cutting lower lows, suggesting bulls have been succumbing to selling pressure for years and keeping prices higher.
Looking at the monthly chart, the monthly bar will finish strong on a bullish note, which will set off a double bar bullish reversal pattern that could spur demand.
This will then help to further boost the price of ETH. Still, the relatively lower trading volumes than in July 2022 indicate that participation is not at historically high levels.
The June bull run that backed this month’s rally could provide a foundation for further gains, which would likely mirror January 2021’s. Another 40% surge against Bitcoin would see ETH close above 0.08 BTC and bring the coin closer to its 2017 highs.
Overall, Bitcoin is holding strong. Starting in September 2022, BTC has outperformed ETH, erasing gains from 2020 and 2021. As a result, a descending channel was formed, but participation levels were also relatively low during this lower stage of the decline.
Technically, this is bullish for ETH based on volume analysis. Still, a close above 0.08 BTC would be a strong case for the bulls. This could lay the foundation for ETH to strengthen and further narrow BTC's lead.
Spot Ethereum ETF Driving Demand: Road to $4,900?
Since the launch and final approval of a Bitcoin spot exchange-traded fund (ETF) in January, the digital asset has been the only one recognized by the U.S. Securities and Exchange Commission (SEC).
This advantage has made BTC the go-to asset for institutional investors, with the approval of derivative products. Wall Street investors such as Fidelity and BlackRock have been allowing exposure to BTC through spot ETFs over the past four months, resulting in billions of dollars being pumped into the asset.
However, that changed last week when the US SEC approved the listing of all spot Ethereum ETFs, with ETH staking removed from the amended 19b-4 filing.
Still, the fact that Ethereum is almost clear is a huge boost for the network and the platform. In response, the price of ETH has soared by 30%, surpassing Bitcoin.
It’s likely that ETH prices will continue to rise in the coming weeks, and while it remains to be seen what the reaction will be, especially among investors, the coin will likely rise similarly to BTC prices since mid-January 2024, possibly breaching $4,100 and even its 2021 high.
Featured image from iStock, chart from TradingView
