Ethereum is starting to close above the top of its long-term descending channel visible on the daily time frame to signal that a big reversal is due. However, price has a few resistance levels to clear before confirming that bulls are in control.
For one, price appears to be finding resistance at the 100 SMA dynamic inflection point and the $125 major psychological level. This moving average is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the longer-term selloff is more likely to resume than to reverse.
Then again, the gap between the moving averages is narrowing to reflect slowing bearish pressure. It has a long way to go before indicating that a bullish crossover is possible, though. Also, RSI looks ready to turn lower to indicate a return in selling pressure. Stochastic is also in the overbought region to reflect exhaustion among buyers.
Once both oscillators start edging lower, selling pressure could pick up and lead to a drop back to the nearby $100 mark or the mid-channel area of interest. Sustained bearish momentum could even drag ethereum down to the swing low or the bottom of the channel.
However, sentiment in the industry has been mostly positive these days, likely on account of bullish forecasts for bitcoin and its peers. Anticipation for the institutional platform of Fidelity is also picking up and might usher in stronger volumes as the launch draws closer.
It has been reported that ethereum mining rewards are at their record lows. According to Etherscan on February 10, 13,370 new ETH have been created, down from over 20 thousand in December 2018 due to the increase in mining difficulty. Still, an upgrade scheduled for February 27 could make mining easier again and lead to a recovery.