- ETH/BTC is forming a classic bullish reversal pattern similar to the one from 2019-2021, which led to a 140% price surge for Ether
- The pattern, known as an inverse-head-and-shoulders (IHS), suggests that ETH could surge by over 50% against BTC by the end of 2024
- The launch of spot Ether exchange-traded funds (ETFs), possibly by July 2, could trigger the bullish technical scenarios discussed
Ethereum‘s native token Ether (ETH) will likely explode by over 50% versus its top-ranking rival Bitcoin (BTC) in the coming months, according to a technical setup called the inverse head-and-shoulders (IHS).
IHS Pattern Formation Resembles 2021’s 140% Surge
An IHS pattern is characterized by the formation of three troughs below a common neckline resistance, such that the middle trough (the “head”) becomes deeper than the other two troughs (“shoulders”), which are roughly of the same length.
In a perfect scenario, an IHS pattern resolves when the price breaks above the neckline resistance after the formation of the right shoulder. In doing so, the price rises by as much as the maximum distance between the head’s lowest point and the neckline resistance.
As of June 17, the ETH/BTC pair seesawed after forming what appears to be the head of its IHS pattern. Thus, it still awaits an extended run-up toward the common neckline resistance level at around 0.061 BTC.
Afterward, the pair may experience modest pullback and recovery to retest the neckline, thus completing the IHS pattern formation.
Overall, a successful breakout above the neckline (accompanying a rise in trading volumes) will bring ETH/BTC’s upside target to around 0.084 by the year’s end, up over 50% from the current price levels.
Bitcoin Halving Fractal Boosts ETH/BTC Chances
ETHBTC’s bullish outlook for 2024 gains additional momentum from its historical post-Bitcoin halving price behavior.
For example, the pair surged over 330% following the third Bitcoin halving in May 2020 and rallied over 900% after the second Bitcoin halving in July 2016. It remained within a large triangle pattern in both instances.
ETHBTC has been consolidating sideways since the fourth Bitcoin halving in April 2024, holding above the lower trendline of its triangle range while eyeing a rally toward the upper trendline at around 0.062 BTC, up by about 20% from the current price levels.
Interestingly, the upside target aligns with the IHS neckline resistance as mentioned above. Thereby fluctuating inside the triangle range will likely enable ETH/BTC to complete its IHS formation, leading to an eventual technical breakout if the pattern plays out as intended.
From a fundamental perspective, the launch of spot Ether exchange-traded funds (ETFs) possibly by July 2024 may trigger the technically bullish scenarios discussed above.
