Ethereum failed in its last two attempts to break below the $640 level to create a double bottom formation on the 1-hour chart. Price has yet to test the neckline at $740 and a break higher could spur a rally of the same height as the chart formation.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is still to the downside after a failed upward crossover earlier on. In addition, these moving averages seem to be holding as dynamic resistance.
RSI is on the move up to signal that buyers have the upper hand. However, the oscillator is approaching overbought levels, which means that bullish pressure could be exhausted soon and sellers could return. In that case, another test of the bottom could be underway.
The recovery in risk appetite has led to some support for cryptocurrencies like ethereum in recent sessions but market uncertainty remains. In particular, the political troubles in Italy could wind up hurting global markets as European stocks have already been tumbling on its account.
To top it off, resurfacing trade war jitters might also keep a lid on gains for riskier assets like ethereum. The lack of positive updates in the industry and the ongoing investigation into South Korea’s largest crypto exchange is also dampening sentiment.
On a more upbeat note, Circle raised $110 million in venture capital for ethereum coin backed by dollars. This would fall into the category of stablecoins which are designed to resist market fluctuations.
For now, traders might have to hold out for the next batch of developments in Casper, which is an upgrade to the ethereum network. The launch of the Casper FFG is scheduled for summer – autumn of 2018 and will require a hard fork to ensure compatibility to the new network.