Ethereum has formed lower highs and lower lows to trade within a downtrend channel in its 1 hour time frame. The price has found support below and seems ready to test the resistance again.
By applying the Fibonacci retracement tool, the 61.8% level aligns with the top channel around $ 300. This is also just below the 100 SMA dynamic inflection point, which could also keep you under control earnings. If this were the case, Ethereum could return to the lowest minimum at $ 250.
The 100 SMA is below the 200 longer-term SMA to indicate that the path of least resistance is downward. In other words, the selloff is likely to resume rather than the other way around. The gap between moving averages is also widening to reflect greater sales pressure.
RSI is on the rise but nearing the overbought territory to indicate that buyers have control but may soon lose momentum. Stochastic is also plunging into overbought territory to reflect the exhaustion of the bulls. Turning down could bring the sellers back before the price hits the top of the channel.
Ethereum broke under a key support zone, probably attracting even more selling pressure as investors hurried to liquidate positions before even finding out what is driving the move. There do not seem to be any catalysts for the sudden drop, at least based on securities, but above all on sentiment-based trading.
Traders have a weak appetite for riskier assets these days because of the crisis in Turkey which is feared of causing contagion to European banks and the global economy. However, cryptocurrencies have shown a tendency to do well when these situations persist, especially once investors start moving funds from traditional markets more sensitive to a financial crisis.
If this phenomenon takes over, Ethereum may have a chance to bust out of the channel and start a reversal. It would be useful, however, if this were also supported by positive developments in the sector itself.