Ethereum has been on a strong climb but could be due for a dip as it tests an area of interest visible on the daily time frame. Applying the Fibonacci retracement tool on the latest swing high and low shows that price is currently testing the 50% level.
The next correction levels are closer to a former support zone that might keep gains in check moving forward. In that case, ethereum could dip to the swing low or just the nearby support zones.
The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In other words, the climb is more likely to resume than to reverse. Price has also moved past the 200 SMA to signal a pickup in bullish pressure.
However, the gap between the moving averages is narrowing to signal weakening bullish momentum. The 100 SMA might hold as near-term resistance as well. Note that price is approaching the $800 major psychological barrier which could contain plenty of take-profit orders.
Stochastic has been indicating overbought conditions for quite some time, so a return in selling pressure could be due as buyers take a break.
Sentiment in the cryptocurrency has been mostly positive these days, supported by a pickup in risk-taking in the financial markets. However, the dollar is still somewhat supported on account of improving data and strengthening rate hike expectations.
Also, it was reported that ethereum wallet client MyEtherWallet fell victim to a hacking attack, reviving security concerns in the industry. As MyEtherWallet confirmed on Twitter:
“Couple of DNS servers were hijacked to resolve myetherwallet.com users to be redirected to a phishing site,” the company said. “This is not on @myetherwallet side, we are in the process of verifying which servers to get it resolved asap.”
Even so, ethereum has been able to join the rest of its cryptocurrency peers in the bull run these days, as market fundamentals and investor confidence remain intact.
*The market data is provided by TradingView.