Ethereum could be in for more declines as it forms a double top on its 4-hour chart. Price is just halfway through its move back down to the neckline, but a break below that support level could spur a drop that’s the same height as the formation.
The 100 SMA is still above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, there’s still a chance for support levels to hold. However, the gap between the indicators has narrowed to reflect weakening bullish momentum and a potential bearish crossover. Ethereum is also moving below the 100 SMA as an early indicator of bearish pressure and might also be poised to fall below the 200 SMA dynamic inflection point.
RSI is already indicating oversold conditions, though, so sellers could take a break and allow buyers to take over from here. In that case, a bounce off these current levels could take ethereum back to the tops around $170 or higher. Stochastic is also turning up from the oversold region to signal that buyers are ready to return. A break below the $100 neckline, on the other hand, could lead to a selloff that’s around $70 in size.
Ethereum appears to have successfully completed its Constantinople and St. Petersburg upgrades without much of a hitch, but this outcome didn’t spur an immediate bullish reaction from price. This suggests that the positive sentiment from the previous month may have already run out of steam, and traders are hoping to get actual developments before reviving their long positions.
There is a lot riding on the Fidelity institutional platform launch said to push through this month, so progress might be enough to encourage bulls to return. Then again, the increased volumes could weigh on volatility for the time being.