Ethereum’s native token Ether (ETH) has successfully avoided a bearish technical setup to reach a two-month high against Bitcoin (BTC).
ETH price bear flag invalidated
The ETH/BTC pair invalidated its prevailing “bear flag” pattern after Ethereum developers announced this July 14 that their long-awaited switch to proof-of-stake (called the Merge) will most likely occur in September.
ETH/BTC has rallied by more than 22% since the announcement, reaching 0.067, its highest level since May 25. Furthermore, the pair’s sharp upside move has pushed its net retracement gains to 37% when measured from June 13’s local bottom of 0.049.
Ether tests key inflection zone
Strong fundamentals led by the Merge launch could have ETH/BTC pursue a run-up toward the 0.072-0.076 area. This range was instrumental as resistance in January and March-May. Therefore, it should serve as the next upside target for Ether bulls.
But there’s a catch. Notably, ETH/BTC has been showing signs of a weakening upside momentum near what appears to be a strong resistance confluence.
That includes a falling trendline resistance, a Fibonacci retracement line (near 0.066 BTC), and a support-turned-resistance area (the 0.064-0.068 BTC range), as shown below.
In addition, ETH/BTC’s daily relative strength index, a momentum oscillator indicator, has crossed into so-called “overbought” territory, suggesting elevated risks of a sell-off.
Related: ETH traders gauge fakeout risks after 40% ETH price rally
Independent market analyst “Altcoin Sherpa” cited a similar technical setup this July 18, noting that the ongoing ETH/BTC rally could be “unsustainable.”
$ETHBTC: This is a weird chart; super strong in the short term but I’m guessing this rally will be unsustainable. Really conflicting thoughts for this being ‘the bottom’; lots of FA factors coming in w. merge. Maybe .075 is next up if this area gets cleared. $ETH #Ethereum
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