Cryptocurrency News

Ethereum flashes a classic bullish pattern in its Bitcoin pair, hinting at 50% upside


Ethereum’s native token, Ether (ETH), looks poised to log a major price rally versus its top rival, Bitcoin (BTC), in the days leading toward early 2023.

Ether has a 61% chance of breaking out versus Bitcoin

The bullish cues emerge primarily from a classic technical setup dubbed the “cup-and-handle” pattern. It forms when the price undergoes a U-shaped recovery (cup) followed by a slight downward shift (handle) — all while maintaining a common resistance level (neckline).

Traditional analysts perceive the cup-and-handle as a bullish setup, with veteran Tom Bulkowski noting that the pattern meets its profit target 61% of all time. Theoretically, a cup-and-handle pattern’s profit target is measured by adding the distance between its neckline and lowest point to the neckline level.

The Ether-to-Bitcoin ratio (or ETH/BTC), a widely tracked pairing has halfway painted a similar setup. The pair now awaits a breakout above its neckline resistance level of around 0.079 BTC, as illustrated in the chart below. 

ETH/BTC weekly price chart featuring cup-and-handle. Source: TradingView

As a result, a decisive breakout move above the cup-and-handle neckline of 0.079 BTC could push the Ethereum price toward 0.123 BTC, or over 50%, by early 2023.

ETH/BTC weekly price chart featuring cup-and-handle breakout setup. Source: TradingView

Time to turn bullish on ETH?

Ether’s strong interim fundamentals compared to Bitcoin further improve its possibility of undergoing a 50% price rally in the future.

For starters, Ether’s annual supply rate fell drastically in October, partly due to a fee-burning mechanism called EIP-1559 that removes a certain ETH amount from permanent circulation whenever an on-chain transaction occurs.

Ethereum supply rate post-Merge. Source: Ultrasound.Money

XEN Crypto, a social mining project, was mainly responsible for raising the number of on-chain Ethereum transactions in October, leading to a higher number of ETH burns, as Cointelegraph covered here.

Over 2.69 million ETH tokens (~$8.65 billion) have gone out of circulation since the EIP-1559 update went live on Ethereum in August 2021, according to data from

It shows that the more clogged the Ethereum network becomes, the higher the Ether’s probability of entering a “deflationary” mode gets. So, a depleting ETH supply may prove bullish, given the token’s demand rise simultaneously. 

In addition, Ethereum’s transition to a proof-of-stake consensus mechanism via “the Merge” has acted as an Ether supply-sucker, given each staker—individual or pool—is required to lock away 32 ETH in a PoS smart contract to earn annual yields.

The total Ether supply held by Ethereum’s PoS smart contact reached an all-time high of 14.61 million ETH on Oct. 31.

Ethereum 2.0 total value staked. Source: Glassnode.

In contrast, Bitcoin, a proof-of-work (PoW) blockchain which requires miners to solve complex mathematical algorithms to earn BTC rewards, faces persistent selling pressure. 

Related: Public Bitcoin miners’ hash rate is booming — But is it actually bearish for BTC price?

In other words, a comparatively higher selling pressure for Bitcoin versus Ether.

ETH/BTC needs to break the range resistance

Ether’s road to a 50% price rally versus Bitcoin has one strong resistance area midway, acting as a potential joy killer for bulls.

In detail, the 0.07BTC to 0.08 BTC range has served as a strong resistance area since May 2021, as shown below. For instance, the December 2021 pullback that started after testing the said range as resistance resulted in a 45% price correction by mid-June 2022.

ETH/BTC weekly price chart. Source: TradingView

A similar pullback could have ETH test the 0.057 to 0.052 range as its primary support target by the end of this year or early 2023.