A falling wedge setup, as well as a rumor that Amazon is preparing to accept cryptos, is also increasing Ether’s positive appeal. The price of Ether (ETH) jumped to a three-week high on Monday, triggered by similar gains in the Bitcoin (BTC) market that emerged in the wake of rumors of Amazon’s foray into the cryptocurrency sector.
A job posting from the retail giant revealed that it is seeking an executive to build its “digital currency and blockchain strategy”. Meanwhile, worldwide media reports, based on internal sources, speculate that Amazon might start accepting Bitcoin as payments. As a result, the BTC/USD exchange rate rose to a six-week high following the news.
Ether, whose 30-day correlation with Bitcoin is at 88%, also rose on Amazon’s crypto integration rumor. On Monday, the ETH/USD exchange rate rocketed to an intraday high of $2,390, reaching its highest level since July 8. The pair was up more than 6.7% as of 12:20 GMT.
Ether has bottomed out near $1,700 twice in a row in recent sessions
However, as measured from its previous low of $1,720 on Tuesday, the net upward recovery came in at 38.94%. The retracement was strikingly similar to the bullish price action between June 22 and July 7, with the ETH/USD recovering more than 40% from a low at $1,700.
That said, Ether hit two lows near the $1,700 range before bouncing up 38%-40%. Analyst Jonny Moe saw that flipped retracements move and ruled them out as a double bottom pattern.
The bullish setup
In detail, double bottoms are bullish trend reversal patterns, consisting of two troughs around the same level hanging from a neckline resistance. As it plays out, price eventually reverses the neckline resistance as support and rises higher by as much as the pattern’s max height. Stellar XLM price has risen.
Ether fits the description. It has formed two consecutive bottom levels at around $1,700. Meanwhile, the neckline resistance is near $2,390. Therefore, the maximum height of the pattern is $690.
Ether’s double bottom configuration envisions a price around $3,000
Should the ETH/USD break above the USD 2,390 neckline resistance accompanied by a spike in volume, the pair is expected to extend its upward movement by around USD 690. That would roughly push it toward $3,000 (with $2,948 serving as a psychologically bullish target based on historical price action).
Another technical pattern in play is surpassing the double bottom’s upside target by predicting Ether prices at close to $3,250.
The pattern, also known as a falling wedge, develops when the price trades lower within a range that starts out wide but contracts during the downtrend. It eventually causes the price to turn bullish as it sets its profit target at a level typically above the wedge height (measured from the breakout point). VET Vechain price has risen.
Ethereum’s Falling Wedge Configuration
So it appears that the ETH/USD exchange rate is undergoing a bullish breakout, confirmed by a high volume close above the wedge resistance trendline. The profit target for the current setup is $1,208 above the breakout level, which pushes the price towards $3,257.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move carries risks, you should do your own research when making a decision.