Ethereum price breaks out, hits 2-month high against Bitcoin - Is the rally sustainable?

The rally pushed ETH price towards strong resistance levels, increasing its downside risks against Bitcoin.

Ethereum's native Ether (ETH) token managed to avoid a bearish technical setup to hit a two-month high against Bitcoin (BTC).

ETH Price Bearish Flag Invalidated

The ETH/BTC pair invalidated its 'bearish flag' pattern after Ethereum developers announced on July 14 that their long-awaited move to proof-of-stake (known as the merge) will most likely take place in September .

ETH/BTC has rebounded over 22% since the announcement, hitting 0.067, its highest level since May 25. of 0.049.

ETH/BTC daily price chart. Source: TradingView

Ether tests key inflection zone

Strong fundamentals led by the launch of Merge could cause ETH/BTC to continue its run towards the 0.072-0.076 area. This range was instrumental in the resistance in January and March-May. Therefore, it should serve as the next upside target for Ether bulls.

But there is a catch. Notably, ETH/BTC has shown signs of weakening bullish momentum near what appears to be a strong confluence of resistance.

This includes falling trendline resistance, a Fibonacci retracement line (near 0.066 BTC), and a support-turned-resistance zone (the range of 0.064 to 0.068 BTC), as shown below.< /p>

ETH/BTC daily price chart. Source: TradingView

Furthermore, the daily relative strength index of ETH/BTC, a momentum oscillator indicator, has...