Ethereum recently made a sharp drop below its short-term rising channel but has bounced off the $102.70 level. Price is in the middle of a correction, but technical indicators seem to be suggesting that a return in selling pressure is due.
The 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to gain traction than to reverse. The gap between the indicators is widening to reflect increased bearish momentum also.
The 100 SMA appears to be holding as dynamic resistance since it lines up with the 38.2% Fibonacci level. The 200 SMA coincides with the 50% level and has also kept gains in check. A larger correction to the 61.8% level at the $110 major psychological mark might still be possible until ethereum makes new lows.
RSI is closing in on the overbought zone but looks ready to turn lower to signal a pickup in bearish momentum. Stochastic, on the other hand, has plenty of room to climb so buyers might stay in the game for a bit longer.
Ethereum is struggling to recover in the current bear market, but it seems that positive commentary from a formerly bearish analyst has allowed a bounce to happen. JPMorgan’s Nikolaos Panigirtzoglou cited that institutions could see a renewed interest in cryptocurrencies this year, saying:
“The stability that we are seeing right now in the cryptocurrency market is setting the stage for more participation by institutional investors in the future. The cryptocurrency market was a new market. It went through a bubble phase [and] the burst.”
However, he did admit that this could take some time as regulators are currently being the roadblocks as oversight is “slow to realize.”
For now, this seems to be keeping ethereum and its peers afloat, but it remains to be seen once more if they could go for more gains from here.