Ethereum appears to be pulling up from its slide, but this may be a mere retracement on the bearish trend. Price has been moving below a descending trend line connecting the highs on the 4-hour time frame.
Applying the Fibonacci retracement tool on the latest swing low and high shows that the 50% level lines up with the trend line around $240. A shallow pullback could find resistance at the 38.2% Fib at $218.50. A larger pullback could last until the 61.8% Fib just past the $250 mark, area of interest, and 100 SMA dynamic inflection point.
On the subject of moving averages, 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 resume than to reverse. However, the gap between the two has narrowed to signal a slowdown in selling pressure.
Cryptocurrencies seem to be paring their losses so far, although this might merely be midweek profit-taking. Note that ethereum has been one of the weakest performers as it has also been getting additional drag on ICO liquidation.
This has already been the case in the past slide, with many pinning the declines on folks cashing out on ICOs which were mostly created using the ethereum blockchain. Of course breaks of technical levels led to even more selling in both ether and ICOs, thereby worsening the slide.
Ethereum also took hits when a comment by its founder Vitalik Buterin was misinterpreted.
No major catalysts are lined up for ethereum either, so there’s a good chance the downtrend could carry on unless there’s a major change in sentiment. Some are looking to the SEC ruling on bitcoin ETF applications as the next potential catalyst, but it could turn out against cryptocurrencies and spur an even deeper slide.