Ethereum (ETH) Price Analysis: Back in Selloff Mode?
Ethereum is trading inside a descending channel and is bouncing off the resistance, so another test of support may be underway. Price is currently testing the 38.2% extension level but could be due for a deeper drive to the next Fib levels.
The 50% extension is located at the $672 level then the 61.8% extension is near the mid-channel area of interest. Stronger selling pressure could take it down to the 78.6% extension at $633.55 or the full extension at $604 close to the channel bottom.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. The 200 SMA also recently held as dynamic resistance and it looks like the 100 SMA could hold as a ceiling from here as well.
RSI is heading south so price could follow suit while sellers have the upper hand. Once the oscillator hits oversold levels and turns back up, buying pressure could return and lead to another bounce.
Cryptocurrencies appear to be starting the week on the back foot due reports that South Korea’s largest bitcoin exchange is under investigation for fraud. Investors could stay on edge about regulation and security troubles in the industry, which might prevent buy orders from piling in.
There’s not much in the way of top-tier events in the US but geopolitical risk could continue to prop up the safe-haven US dollar. Recall that Trump decided to pull the US out of the Iran deal, which could have ramifications on international relations and peace and order in the Middle East region. Further conflict could keep risk-off flows in play and this appears to be bearish for cryptocurrencies like ethereum.
It has been reported that a UK firm is offering ethereum futures but market watchers remain wary as the Fed recently noted that the launch of bitcoin futures may have caused the slide back in December.