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You can literally feel it boiling on the Ethereum course. Something is simmering beneath the surface, and as I will show in this article, there is compelling evidence that the price for ETH relative to the price of Bitcoin could be bursting very soon.
The past few days have undoubtedly been positive for investors in the cryptocurrency space. Above all, the price of Bitcoin is one of the best performers among the best cryptocurrencies with an increase of 15.4%. By comparison, the price of Ethereum has lagged behind Bitcoin with a 7.4% price increase over the past 7 days. Certainly 7.4% is far from negative within a week, but that’s barely half of what Bitcoin has achieved. But the delay for Ethereum could end very soon.
A chart was recently posted on Bitcoin-Bude.de’s Telegram channel, indicating that the price of Ethereum may soon be higher than the price of Bitcoin.
The ETH / BTC chart shows what is commonly known as a descending wedge pattern. We will now take a closer look at what exactly this lineup says about the Ethereum course and its possible performance over the next few days.
Ethereum price versus Bitcoin in the falling wedge formation
A falling wedge formation is rare, but easy to spot. It has few and at the same time very clear characteristics. Most importantly, this includes two downward sloping trend lines. Both of these trend lines must intersect at the top of the formation. This means that although both trend lines are sloping down, the drop angle of the top line is steeper. As we can see, the Ethereum course fulfills this first feature.
There should be a total of at least 5 touches on the trend lines so that a real wedge formation can be assumed here. Otherwise there is reason to be skeptical. As we can see, however, the Ethereum course versus Bitcoin also fulfills this feature with flying colors.
Another feature is that this training lasts for at least 3 weeks. As a rule, the wedge formation moves over a time interval of 3 weeks to 4 months. The Ethereum course has been forming for almost 3 months. It is also near the top of the formation, which suggests an early breakout (if the pattern resumes).
Finally, the volume trend gives us the final characteristic of the wedge formation, although it is not a must. The volume usually decreases steadily until the eruption within the formation. This feature is also met by the Ethereum vs Bitcoin course.
Estimated price target for the Ethereum course
The falling wedge models are very reliable graphic models. Statistically (based on Thomas N. Bulkovski’s encyclopedia of graphic models), the error rate is only 10%. If the outbreak is expected, this error rate drops to as low as 2%. In the case of ETH, there would be a breakout against Bitcoin if the Ethereum price on the daily chart closes above the upper trend line.
The good news for all arithmetic is that calculating the minimum target price for the wedge formation is very simple. Strictly speaking, it is not a calculation at all, because the minimum price target is marked by the highest point of the formation. In the case of the Ethereum vs Bitcoin course, it would be included 0.04054 BTC. This price target is currently knapp 35% above the current price level of 0.03000 BTC.
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