The Ethereum blockchain asset, ETH (ETH), could rise to $6,500 in the coming sessions.
The bullish analogy is based on an art book model called the ‘cup and pen’. In particular, the structure of the cup and handle develops after the price initially rises significantly and then corrects to form a rounded bottom called the ‘cup’.
This move comes after a bounce to the previous high and a failed attempt to break above the specified level. As a result, the price comes back up and cuts off a smaller, round base called the “handle”.
In the end, the price returns to the previous high for the second time and successfully hits, resulting in a movement equal to the depth of the cup.
So it looks like the ETH/USD exchange rate has pulled a pot 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 around $2,437. As a result, if the pair retests the $4,122 resistance for a bullish breakout move, the bullish view will increase by as much as $2,437. At the same time, Ether expects growth of $6,549.
Harvard research shows that the cup and handle patterns on the daily charts have 65% and 68% success rates in the forex and stock markets, respectively.
FOMO Institutional Running
The similarity is shown with the growth potential of ether based on increased institutional interest.
In a report released on September 7, London-based international banking giant Standard Chartered discussed the economic benefit of Ether, adding that the cost of buying 1 ETH could rise to $26,000-$35,000 in the future.
The report stated that “the current transition to ETH 2.0 could transform ETH by increasing functionality, scalability, and reducing environmental concerns, although it may pose more complex security concerns.”
“The timing of ETH 2.0 may be off, but in the short term, net supply cuts – as ETH invests in ETH 2.0 – should provide a price cushion.”
In an interview with CNBC, Ark Invest CEO Katie Wood stated that her company will split its crypto investment into 60% Bitcoin and 40% Ether. The former AllianceBernstein head predicted a rise in demand for ETH tokens due to the continued increase in the mania for decentralized finance (DeFi) and non-financial tokens (NFT) backed by Ethereum.
“I am fascinated by what is happening with DeFi, which is reducing the cost of financial services infrastructure, and I know that the traditional financial industry is not being valued at the moment,” Wood told CNBC TV presenter Andrew Ross Sorkin at the conference. SALT 2021 conference in New York.
“Our confidence in Ethereum has risen as we witness the beginning of this transition from Proof of Work to Proof of Effort.”
Meanwhile, Ethereum has also been criticized for not dealing with high transaction fees and network restrictions issues. This has prompted new tier one competitors in the blockchain such as Solana, Avalanche and Cardano to devour some of Ethereum’s market dominance.
According to the official Ethereum roadmap, it will take another two years for the proof-of-stake protocol to become fully functional. The transition consists of three stages. In the first, Ethereum implemented the Beacon Chain to offer pricing on a separate level.
Related: Cointelegraph Research: Is Solana an Ethereum Killer?
The next step, planned for later in 2021, will be the integration of the original Ethereum chain with the Beacon chain. Meanwhile, Ethereum will introduce clipping chains that are expected to allow Ethereum to process multiple downstream transactions.