Ether-Bitcoin Ratio On Bullish Path After Triangle Breakout, Says Trader

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The ether-to-bitcoin (ETH/BTC) ratio could rally toward a two-month high, according to Lewis Harland, portfolio manager at Decentral Park Capital.

This is because the ratio broke out of a multi-month triangular pattern, often referred to as a wedge, indicating a bullish victory in the extended tussle with the bears.

“ETH/BTC broke out of its multi-month wedge to the upside,” Harland told CoinDesk, adding that the breakout opened the doors for a rally to early December highs of 0.07636 and US highs. early November near 0.078.

The breakout suggests that the path of least resistance for ETH/BTC is higher. (TradingView, CoinDesk)

The chart shows that the ether-to-bitcoin ratio crossed the upper end of the three-month triangle or wedge identified by trend lines connecting the highs recorded in September, October and December and the lows reached in October, November and December.

Triangles occur when bulls and bears are unwilling or unable to lead the price action, resulting in volatility compression. Therefore, a possible breakout or breakdown often results in a large bullish or bearish movement.

In other words, ETH/BTC looks set for a noticeable rally.

“We may see a rally of ‘disbelief’ for ETH over the next few weeks,” Harland said, citing the impending Ethereum upgrade in Shanghai that will open up staked Ether withdrawals and the expected reduction in accumulation fees for users after the implementation of EIP4844 as bullish catalysts for the cryptocurrency.

Bitcoin, meanwhile, may continue to lag due to the miner selloff. “Miners are increasingly distressed, which is indicated by a higher hash rate where the market may worry that miners are selling inventory to stay operational and competitive,” Harland noted.

Also Read: Bitcoin Could Drop To $10,000-$12,000 By Q1 2023, Says VanEck

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