Ethereum is aiming for a bullish target of $ 6,500 as the ETH price chart draws “Cup and Handle”

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

The bullish analogy is inspired by a technical pattern in a textbook called  “Cup and handle” or “mug and handle”. In detail, a cup and handle structure will be developed after the price has recovered significantly to the upside and then corrected to create a rounded bottom called a “cup”.

The move follows a rebound to the previous high and a failed attempt to break that level. As a result, the price pulls back one more time, marking a smaller rounded bottom, called the “handle”.

Ethereum is aiming for a bullish target of $ 6,500 as the ETH price chart draws “Cup and Handle”
Ethereum is aiming for a bullish target of $ 6,500 as the ETH price chart draws “Cup and Handle”

Eventually, price returns to previous high a second time and successfully shoots upresulting in a movement equal to the depth of the bowl.

So it looks like the ETH / USD pair has pulled a cup and is now forming a handle, as shown in the chart below.

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

The depth of the ETH / USD cup is almost USD 2,437. If the pair retests the resistance at $ 4,112 for a bullish breakout, its prospect of a surge to $ 2,437 rises. In doing so, Ether would expect a rally towards $ 6,549.

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

Institutional FOMO

Ethereum’s bullish analogy appears in the context of growing institutional interest.

In a report released September 7th Standard Chartered, a multinational banking giant based in London, Discussing the low-cost use case for Ether, he added that the cost of buying an 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 raise more complex security concerns.”it says in the report.

“The time for the introduction of ETH 2.0 could be delayed, but in the short term the decline in the net supply, as ETH relies on ETH 2.0, should provide a price cushion.”

In an interview with CNBC, Cathie Wood, CEO of Ark Invest, said his company would split its cryptocurrency investments into 60% Bitcoin and 40% EthereumThe former AllianceBernstein executive envisioned a surge in demand for ETH tokens as the continued growth of Ethereum-powered decentralized finance (DeFi) and craze for non-fungible tokens (NFT).

“I’m intrigued by what is happening at DeFi, which is breaking down the cost of financial services infrastructure in a way that the traditional financial industry currently does not appreciate.”Wood told CNBC host Andrew Ross Sorkin at the Salt technology conference 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

In the meantime, Ethereum has also been criticized for failing to handle higher transaction fees and network congestion issues.This resulted in emerging first-tier blockchain rivals such as Solana (SOL), Avalanche (AVAX), and Cardano (ADA) eating up some of Ethereum’s market hegemony.

Ethereum would take another two years to become a fully functional proof-of-stake protocol, according to its official roadmapThe transition consists of a three-step process: In the first, Ethereum implemented Beacon Chain to introduce staking on a separate level.

The next step, planned later in 2021, will be the merger of the original Ethereum chain with the Beacon chain.In the meantime, Ethereum will be rolling out â ???? Broken chainsâ ???? who hope to enable Ethereum to process further transactions in the final phase.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com.

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