Ethereum eyes $6.5K bullish target as ETH price chart paints ‘cup and handle’

The Ethereum blockchains native asset Ether (ETH) is in danger of exploding to $6,500 over the next sessions.

ETH is shaped like a cup with a handle. What are your thoughts?
Raoul Pal (@RaoulGMI September 15, 2021

The bullish analogy draws its cues from a technical pattern called “cup and handle”. It is formed when the price rallies strongly to the upside, and then corrects to create a rounding bottom. This is known as the “cup”.

This move comes after a rebound towards the previous high and a failed breakout attempt at the top. The price moves back and finds a smaller bottom called the “handle”.

The price eventually returns to its previous high and breaks out with success, giving rise to a move that is equal to the cups depth.

It seems that the ETH/USD exchange rates has made a cup and is now making a handle as shown in the chart below.

Daily chart of ETH/USD with handle and cup formation Source: TradingView

The ETH/USD cups depth is almost $2,437. The pairs chances of rising by as high as $2,437 if it retests $4,112 resistance in a bullish breakout move will increase. Ether would be looking at a run to $6,549.

Harvard University has shown that cup-and handle patterns have a 68% and 65% success rate in stock markets and forex on daily charts.

Institutional FOMO

The backdrop of increasing institutional interest makes Ethers upside analogy seem plausible.

Standard Chartered, a multi-national banking company based in London, published a report on Sept. 7. It discussed Ethers economic uses and suggested that the cost of purchasing 1 ETH might rise to $26,000-35,000 in the future.

The report stated that “ETH 2.0s current transition could transform ETH, increasing its functionality and scalability, and reducing environmental concerns. However it could also raise more complicated security issues.”

“Timelines for ETH2.0 rollout may slip but, in the near term a decreasing net supply — as ETH has been staked for ETH2.0 — should provide price cushion.”

Cathie Wood (CEO of Ark Invest) stated that her company would split its crypto investments in half into Bitcoin and Ether. In the wake of Ethereum-backed decentralized financing (DeFi), and nonfungible tokens (NFT) growth, Cathie Wood, an ex-executive at AllianceBernstein, predicted a greater demand for ETH tokens.

Wood said that DeFi is causing a collapse in the infrastructure cost for financial services. This was evident to Andrew Ross Sorkin, CNBCs anchor at the SALT 2021 conference.

“Our trust in Ethereum has risen dramatically since we have seen the transition from proof of work to proof-of stake.”

Rivalry risk

Ethereum was also criticised for not being able to address higher transaction fees or network congestion. This led to emerging layer-one crypto rivals like Solana, Avalanche, and Cardano gaining a significant share of Ethereums market hegemony.

According to its official roadmap, Ethereum will need another two years before it becomes a fully functional proof of-stake protocol. It is a three-step process. The first step is where Ethereum implemented the Beacon Chain in order to implement staking on a different layer.

Related: Cointelegraph Research – Is Solana an “Ethereum killer?”

The next step will be Ethereums original chain merging with the Beacon Chain. It is expected to take place in 2021. Ethereum will also introduce “shardchains” which are expected to allow Ethereum to process more transactions during the final phase.

com. You should do your research before making any investment or trading decision.

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