ETH/BTC could reach 0.10 this year as the market anticipates Ethereum’s proof-of-stake switch.
Ethereum’s native token Ether (ETH) has dropped about 17% against the U.S. dollar in the last two weeks. But its performance against Bitcoin (BTC) has been less painful with the ETH/BTC pair down 4.5% over the same period.
The pair’s down-move appears as both ETH/USD and BTC/USD drop nearly in lockstep while reacting to the Federal Reserve’s potential to hike rates by 50 basis points and slash its balance sheet by $95 billion per month.
The latest numbers released on April 12 show that consumer prices rose 8.5% in March, the most since 1981.
BTC/USD vs. ETH/USD daily price chart. Source: TradingView
ETH/BTC triangle breakout
Several technicals remain bullish despite ETH/BTC dropping in the last two weeks. Based on a classic continuation pattern, the pair still looks poised to resume its strong bull run in 2022.
Notably, ETH/BTC has corrected from a horizontal resistance level that constitutes an ascending triangle range in conjunction with rising trendline support.
As a rule, ascending triangles send the price in the direction of their previous trends. Therefore, since ETH/BTC was rallying before forming one, there’s a decent chance its bull run could continue toward its Feb. 2018 highs near 0.1 BTC, based on the setup shown in the chart below.
ETH/BTC weekly price chart featuring ascending triangle setup. Source: TradingView
Nonetheless, the interim market setup looks skewed to the downside, with ETH/BTC eyeing a correction towards the triangle’s lower trendline following its pullback from the upper trendline.
The bearish reversal scenario
Ascending triangle breakouts reach their upside targets nearly 73% of all time, a study by Samurai Trading Academy shows.
In a separate report, veteran investor Tom Bulkowski also highlights a 70% success rate for ascending triangles, thus underscoring the strong possibility for Ether to reach 0.10 BTC in 2022.
Related: Bitcoin claws back $40K as 24-hour crypto liquidations near $500M
Nonetheless, this still leaves ETH/BTC with a 30% chance to invalidate its ascending triangle setup.
ETH/BTC weekly price chart. Source: TradingView
As it happens, the pair will break below its triangle’s lower trendline, which also coincides with its 50-week exponential moving average (the red wave in the chart above) near 0.06 BTC, opening the door for a further drop to 0.05 BTC, a support area from May-June 2021.
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