The left shows the daily chart of ETH/USD, and the right is the BTC/USD daily. Ethereum shows relative strength compared with Bitcoin.
ETH/USD has crossed from its bearish area between the lower blue and red bands into the neutral zone between the blue bands. This movement is a bullish development. Moreover, its stochastic, which measures momentum, turned up from Sept 01 2022 (black vertical).
There is a stark contrast when compared with BTC/USD. Bitcoin still languishes in its weak area between the lower blue and red bands. Also, its stochastic remains below 20 (green rectangle), indicative of a strong downwards momentum.
Ethereum is about to overhaul its mechanics in an upgrade called "The Merge." The revamp is due around Sept 15 and will transition from proof-of-work to proof-of-stake. This change is greener, using significantly less energy (up to 99% less, according to the Ethereum Foundation), with users validating transactions with tokens instead of mining.
The Merge may be the start - there are plans for further upgrades and overhauls. The aim is to increase throughput and lower fees. There is no doubt that the stakes are high. However, high risk is related to high reward.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.