The Ethereum-Bitcoin pair displays a classic bullish pattern, suggesting an upside of 50%
In the ETH/BTC pair, a bullish trading pattern suggests the pair may be about to reverse its trend. Ethereum’s native token, €
1,593, is poised to gain a significant price advantage over its top rival, Bitcoin € 20,620, in the days leading up to early 2023.
Bitcoin has a 61% chance of breaking out versus Ether
Bullish cues are largely derived from a classic technical setup called a “cup-and-handle”. The price goes through a U-shaped recovery (cup) followed by a slight downward shift while maintaining a common resistance level.
Traditionally, cup and handle patterns are perceived as bullish, with veteran analyst Tom Bulkowski noting that 61% of the time the pattern meets its profit target. The profit target of a cup-and-handle pattern is calculated by adding the distance between its neckline and the lowest point to its neckline level.
Ether-to-Bitcoin ratios (or ETH/BTC), a widely followed pair, show a similar picture. As shown in the chart below, the pair is now awaiting a breakout above its neckline resistance level of around 0.079 BTC.
Time to turn bullish on ETH?
As a result of Ether’s strong interim fundamentals compared to Bitcoin, it has a better chance of experiencing a 50% price rally in the future.
In October, ETH’s annual supply rate dropped sharply due to a fee-burning mechanism called EIP-1559 that removes some ETH from circulation whenever on-chain transactions are completed.
The XEN Crypto social mining project increased the number of on-chain Ethereum transactions in October, leading to a higher number of ETH burns, approximately $8.65 billion in ETH has been burned since the EIP-1559 update went live on Ethereum in August 2021.
ETH/BTC needs to break the range resistance
There is one strong resistance area midway on Ether’s road to a 50% price rally versus Bitcoin, which could be a dealbreaker for bulls.
A strong resistance area has emerged in the 0.07 BTC-0.08 BTC range since May 2021, as shown below. By mid-June 2022, the price was corrected by 45% after the December 2021 pullback started after testing the resistance range.
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