The inverted cup and handle is a bearish reversal pattern, accompanied by low volume. It is usually resolved after the price breaks below the support level, followed by a decline towards the level with a length equal to the maximum height between the cup top and the support line.
Applying the theoretical definition to the weekly ETH/BTC chart presents 0.03 BTC as the next bearish target, down around 55% from the September 16 price.
Can ETH/BTC Pull the Dow Jones Index?
Alternatively, the ETH/BTC pair could post some big gains in the coming years.
On the weekly history chart, the ETH/BTC pair is plotting potential cup and handle Since January 2018. In other words, a rally of about 0.5 BTC in 2023 is on the table, up more than 520% from current price levels.
Unlike its inverse counterpart mentioned above, cup and handles are bullish reversal patterns with their bullish targets located at levels equal to their maximum height when measured from the breakout point.
Veteran Analyst Tom Bolkowski It is noted that these patterns have a 61% success rate in achieving their bullish targets.
For example, the cup-and-handle pattern that formed on the Dow Jones chart during the Great Depression of the 1930s and 1940s—where it took nine years to develop the cup and the handle another four years—reached its upward target in the 1950s, as shown below.
ETH/BTC is likely now in the handle phase of a similar cup and handle pattern, as shown via the purple shaded descending channel area in the chart below.
The pair is waiting for a breakout move above the 0.08 BTC pattern resistance level. At the moment, it has been swinging lower within the handle range, and is looking to pull back towards the lower trendline at around 0.05 BTC after testing the upper level as resistance this week.
Flipping or flopping?
Ethereum’s ability to outpace Bitcoin through market capitalization is called “volatility.”
Ethereum competes with Bitcoin to become the so-calledHedge against inflation,” according to Joshua Lim, Head of Derivatives at Genesis Trading. Lim cited EIP-1559 in Ethereum The update from August 2021 that introduced the fee-burning mechanism into its protocol.
according to To Ultrasound.Money, Ether supply growth is now minus 1.43% annually. In other words, the token can become “anti-inflationary” over time. Lim argues that it makes Ether an attractive alternative to Bitcoin among institutional investors.
12/ Can Bitcoin continue to belong to the future? Only time will tell if the ETH listing after the merger is strong enough to overthrow the status quo
In the meantime, expect BTC to continue to trade as the financing asset and hedge instrument of choice for the entire asset class
– Joshua Lim (@joshua_j_lim) August 29 2022
But many argue against the choppy narrative, including Rahul Singh, co-founder of the Divi platform FINtokens. he is Cointelegraph said Bitcoin will continue to exist as ‘digital gold’ while Ethereum will become an ‘Internet 2.0’ project.
There is a big difference between the values of digital assets, &
Digital Soft. Values
– AskToRahulSingh ©️ (@AskToRahulSingh) July 13, 2022
As of September 2022, Ether has a market capitalization of $175 billion compared to $372 billion of Bitcoin.
The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risks, you should do your own research when making a decision.