ETH rebounds 8% versus BTC amid hidden bullish divergence formation
ETH has been back against leading crypto rival Bitcoin since September 3rd.
The ETH / BTC pair is down nearly 25% after peaking at 0.07955 BTC in September. When the upper altcoin falls, it leaves lower highs and lower lows, creating an ascending channel.
Thereafter, ETH / BTC broke up out of the channel on Saturday, sparking predictions of a strong prolonged recovery trend. But Sunday sell-off and the ongoing trading session prompted ETH to test the channel’s resistance trendline as support.
ETH price chart shows bullish divergence
Sentiment increases the likelihood that ETH will return to bearish territory, as shown in the chart below.
ETH / BTC daily price chart and bullish divergence | Source: TradingView
At the same time, higher highs in the daily commodity channel index (CCI) from ETH / BTC indicate a hidden deviation from the downtrend. The CCI is a dynamic oscillator that measures the change in the instrument from the statistical average to possible turning points.
Stefan Krecher, market strategist in Germany, Note:
“Hidden divergence is always an indicator of a possible trend reversal. ETH / BTC could bounce back in the coming sessions and the pair’s daily Relative Strength Index (RSI) is not overbought yet. “
Krecher predicts that ETH will hit a monthly pivot point at around 0.071586 BTC, around 8% above current levels. The upside target also coincides with the 0.618 Fib line (0.071505 BTC) of the Fib retracement in the chart above.
On the other hand, there is a risk that if ETH / BTC returns to the descending channel area, it will encounter the support trendline of the area near 0.058238 BTC.
ETH / USD
The bullish ETH / BTC price outlook comes as ETH holds USD 4,000 as solid support and rebounded more than 2.3% on Monday, meanwhile Bitcoin price has risen nearly 5% after hitting a price level Has.
As a result, ETH / BTC looks weaker as BTC / USD rebounds stronger than ETH / USD. The outlook for ETH looks bullish, however, with the support of an ascending triangle pattern as shown below.
Daily ETH / USD Price Chart and Ascending Triangle Setup | Source: TradingView
ETH broke out of the pattern in the daily timeframe, but at very low volume, which showed a weakness in the price trend.
The largest altcoin is currently testing the triangle’s upper trendline in support of a bullish confirmation. If a rebound follows, the price could hit new record highs above $ 4,384, with the triangle’s target near $ 6,500.
In addition, the offer to ETH declined after the London hard fork of the network. Specifically, EIP-1559 started with an update that burned ETH that was previously paid to miners.
Data collected by WatchTheBurn shows that the Ethereum network has destroyed nearly $ 2.25 billion of ETH since the London hard fork was triggered.
In addition, the Ethereum 2.0 deposit agreement attracts more than 8 million ETH, taking it out of circulation for at least a year.
Total value of the participation in the ETH2 smart contract | Source: CryptoQuant
In addition, according to CryptoquantThe funds under management have increased their ETH holdings from 2.43 million in November 2020 to 4.08 million now, indicating growing institutional demand.
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According to Cointelegraph