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

The Ethereum blockchain’s native asset, Ether (ETH), faces the prospect of exploding towards $ 6,500 in the upcoming sessions.

ETH looks like a cup and a handle. Thoughts?

– Raoul Pal (@RaoulGMI) September 15, 2021

The bullish analogy is based on a technical textbook pattern called “cup and handle”. In detail, a cup and handle structure develops after the price has risen significantly and then corrects itself to form a rounded base, the so-called “cup”.

The move follows a rebound towards the previous high and a failed breakout attempt above that level. As a result, the price pulls back again and grinds a smaller rounded base, the so-called “handle”.

Ultimately, the price returns to a previous high for the second time and successfully breaks out, causing a move in the depths of the cup.

So it appears that the ETH / USD exchange rate has painted a cup and is now forming a handle, as shown in the chart below.

ETH / USD daily chart with cup and handle formation. Source: TradingView

The depth of the ETH / USD cup is almost USD 2,437. Should the pair retest the $ 4,112 resistance for a bullish breakout, its prospect of a surge as high as $ 2,437 increases. Ether would envisage an increase towards $ 6,549.

A Harvard study shows that cup-and-grip patterns on the daily time frame charts have a success rate of 65% and 68%, respectively, in the currency and stock markets.

Institutional FOMO on

Ether’s upward analogy appears against the backdrop of growing institutional interest.

In a report released Sept. 7, Standard Chartered, a multinational banking giant headquartered in London, discussed the economic use case of Ether, adding that the cost of buying 1 ETH could rise to $ 26,000- $ 35,000 in the future.

“The current transition to ETH 2.0 could transform ETH by increasing its functionality and scalability and reducing environmental concerns, although it could pose more complex security problems,” the report said.

“The schedules for the introduction of ETH 2.0 could be postponed, but in the short term a falling net supply – since ETH is used for ETH 2.0 – should provide a price cushion.”

In an interview with CNBC, Cathie Wood, CEO of Ark Invest, said that her company will split its crypto investments into 60% bitcoin and 40% ether. The former AllianceBernstein executive envisioned increased demand for ETH tokens amid the continued growth in Ethereum-powered decentralized finance (DeFi) and craze for non-fungible tokens (NFT).

“I am intrigued by what is going on in DeFi, which is breaking down the cost of financial services infrastructure in ways that the traditional financial industry is currently not appreciating,” Wood told CNBC anchor Andrew Ross Sorkin at the SALT conference 2021 in New York.

“Our confidence in Ethereum increased dramatically when we saw the beginning of this transition from proof-of-work to proof-of-stake.”

Rivalry risks

Meanwhile, Ethereum has also been criticized for not being able to handle higher transaction fees and network congestion issues. This caused emerging first-tier blockchain rivals like Solana, Avalanche, and Cardano to eat up some of Ethereum’s market hegemony.

It will take another two years for Ethereum to become a fully functional proof-of-stake protocol as per its official roadmap. The transition consists of a three-step process. In the first, Ethereum implemented the Beacon Chain to introduce staking on a separate level.

Related: Cointelegraph Research: Is Solana an “Ethereum Killer?”

The next step, planned sometime in 2021, will be the original chain merger of Ethereum with the Beacon Chain. In the meantime, Ethereum will introduce “Shard Chains”, which should enable Ethereum to process more transactions in the final phase.

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.

source https://www.bisayanews.com/2021/09/16/ethereum-eyes-6-5k-bullish-target-as-eth-price-chart-paints-cup-and-handle/