Ethereum Price Analysis: ETH/USD Bears in Full Swing!
Ethereum made a downside break from its triangle consolidation pattern to signal a pickup in selling pressure. The chart pattern spans $500 to $1,300 so the resulting selloff could be of the same height.
Cryptocurrencies have been under pressure recently due to a few factors. First is the increased scrutiny of the SEC in requiring exchanges that offer digital assets to register with them. Next is the closure of two small exchanges in Japan due to use of trading funds by a manager for his personal account. Another is news of compromised accounts in a Hong Kong exchange.
With that, ETH/USD broke to the downside and could be in for a prolonged selloff from here. The 100 SMA has also crossed below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to continue than to reverse.
However, stochastic is already indicating oversold conditions, which means that bears are exhausted. RSI is also in oversold territory to show that buyers could regain the upper hand soon.
In that case, a pullback to the broken triangle support around $800-850 could take place before the selloff resumes. This is also close to the inflection points at the moving averages.
Dollar demand also picked up on Trump’s tempered protectionist rhetoric in his announcement on tariffs. Although he blamed other countries and their governments for dumping cheap metal on America, he also said that they will allow exemptions for Mexico and Canada while NAFTA talks are ongoing. He also expressed willingness to give special arrangements to its allies.
At the same time, this has spurred risk-taking in other financial markets, which has been a bearish factor for cryptocurrencies recently. Traders appear more willing to put funds in traditional markets like stocks and commodities during these cases while dumping the likes of bitcoin and ethereum.