Ethereum is trending lower inside a descending channel on the 4-hour time frame and might be gearing up for a move back to the support zones. Price is breaking below short-term consolidation and further losses below $100 could draw more sellers in.
The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to gain traction than to reverse. These moving averages are also close to the top of the channel to add to its strength as a ceiling.
Stochastic is pointing down to confirm that sellers have the upper hand, but the oscillator is nearing the overbought zone to signal that bearish momentum might be exhausted soon. Turning back up could bring buyers in and lead to another test of the channel top around $120.
Sustained selling pressure, especially if volume picks up on a big move down, could take ethereum to the mid-channel area of interest at $70 or all the way down to the very bottom of the channel at $20.
Many blame the pickup in other coins, particularly Tron, as a factor that’s leading investors to cut their ethereum positions. To top it off, the presence of geopolitical risks like trade tensions and Brexit is weighing on traders’ appetite for riskier assets like cryptocurrencies.
It doesn’t help that ethereum once again experienced a delay in its Constantinople upgrade due to security issues being discovered. This may be discouraging for investors who had been hoping to see improved features from the EIPs for quite some time.
Still, any indication that the development team would attempt another upgrade soon could drive interest in ethereum as the additional features could put it a notch above its rivals.