Ethereum price rises 50% against Bitcoin in a month, but there's a catch

The rising ETH/BTC pair is drawing a bearish technical pattern, hinting at a potential correction.

Market analysis

Ether (ETH), the native token of Ethereum, continued its uptrend against Bitcoin (BTC) as euphoria around its upcoming network upgrade, “the merger,” grows.

ETH at multi-month highs against BTC

On the daily chart, ETH/BTC reached an intraday high of 0.075 on August 6, after rising 1.5%. Meanwhile, the pair's gains came as part of a broader rebound trend that started a month ago at 0.049, amounting to around 50% gains.

ETH/BTC daily price chart. Source: TradingView

The ETH/BTC recovery is partly due to the merger, which will move Ethereum from proof-of-work (PoW) mining to proof-of-stake (dot of sale).

Ethereum's 'Rising Wedge' Suggests Selling

From a technical perspective, Ether is looking at potential interim losses as ETH/BTC draws a compelling rising wedge.

Bullish wedges are bearish reversal patterns that occur when price trends rise within a range defined by two converging ascending trend lines. Typically, they resolve after price breaks below the lower trendline by as much as the maximum height of the pattern.

ETH/BTC daily price chart with " increase corner distribution configuration". Source: TradingView

Furthermore, a drop in volume and relative strength index (RSI) against a rise in ETH/BTC further increases downside divergence risks . ...