Ethereum Price Analysis: No Rest for ETH/USD Bears
Ethereum has been on a steady drop but is approaching a long-term area of interest that might spur a bounce. Price is hovering around $400, which has previously served as resistance and might now hold as support.
However, ethereum has also busted through the daily rising trend line around $500 to signal that selling pressure is very strong. The 100 SMA is above the longer-term 200 SMA on this time frame to signal that the path of least resistance is to the upside, but the gap is narrowing to indicate that a downward crossover may materialize soon.
In that case, selling pressure could keep picking up. Stochastic is indicating oversold conditions, though, so a return in bullish momentum might be possible. If that happens, price could pull back to the short-term descending trend line around $500 to attempt a break higher or get more bearish pressure.
The cryptocurrency industry has finished the first quarter of the year on the back foot as headlines have been mostly downbeat in the latter weeks. Google and Twitter will be banning ads for cryptocurrencies on their platforms, which could mean lower activity and volumes.
Meanwhile, the dollar has been able to score some gains across the board on the Fed hike and expectations of more tightening. The NFP report is due this coming week and could shape policy expectations, which would likely push the dollar in a particular direction. A stronger than expected read could reinforce dollar strength against riskier assets like ethereum, especially since trade war jitters have been fading as well.
Creator of ethereum Vitalik Buterin came up with a proposal to cap the maximum supply of ether, the network’s cryptocurrency, be set at 120,204,432, “or exactly 2x the amount of ether” sold in 2014. He says:
In order to ensure the economic sustainability of the platform under the widest possible variety of circumstances, and in light of the fact that issuing new coins to proof of work miners is no longer an effective way of promoting an egalitarian coin distribution or any other significant policy goal, I propose that we agree on a hard cap for the total quantity of ETH.