The ascending triangle promises a significant increase in the price of Ethereum in 2022.
Ethereum’s native token, Ether (ETH), continues to face downside risks amid higher interest rates. However, one analyst believes that the next token sell-off could be a bear trap as market factors weigh into a possible merger next August.

ETH to $4,000?
The price of Ether could reach $4,000 by the end of 2022, according to a technical setup posted by Wolf, an independent market analyst, on May 20.

The analyst assumed that ETH is moving within a multi-month ascending triangle, which includes the resistance of the horizontal trend line and the rising trend support line.

Notably, ETH’s recent retest of the structure’s lower trendline could result in a significant rally towards the upper trendline, which is around $4,000 as shown below.

A three-day ETH/USD price chart with ascending triangle settings. Source: Wolf/TradeView
Wolf took his bullish signals for a similar triangle in 2016 that preceded a major bull run from $1 to $27. Likewise, another occurrence of the ascending triangle in 2017 coincided with a bullish continuation that saw ETH/USD up 270% to over $1,500.

Death spiral between mergers and low liquidity
Wolf’s fractal analysis comes after Preston Van Loon, one of the main developers of Ethereum, confirmed that the long-awaited upgrade of the blockchain project to the Proof-of-Stake consensus mechanism will happen sometime in August.

Wolf noted that Ethereum set up a “bear trap” that made sense prior to the upgrade and complemented its technical setup as discussed above.

The upcoming upgrade has been one of the key catalysts for Ethereum prices in 2021, as many investors believed it would fix a long-standing scalability issue on the Ethereum blockchain while lowering transaction and gas costs. Despite this, the Ethereum Foundation continued to delay the launch.

“Undoubtedly, this lack of progress has played a major role in the recent drop in the price of Ethereum,” notes Bitfreedom Research, a technology stock and cryptocurrency research firm that has predicted that the price of ETH will reach $950-1900 by October 2022 and fall.

On the subject: Analysts find parallels with March 2020: will everything be different this time?

The company cited higher interest rates as the main reason for its bearish outlook for Ethereum, noting:

“The crypto market is moving extraordinarily fast, which means that crypto companies need a LOT of money to grow quickly. Without cash, this could send the Ethereum ERC20 token economy into a death spiral.”

Source: CoinTelegraph