Ethereum gained more downside momentum since its break below the symmetrical triangle visible on the 4-hour chart. This chart pattern spans $170 to around $250 so the resulting slide could be of at least the same height.
Price also seemed to form a bearish flag continuation signal and has also broken below support. In that case, ethereum could be in for a slide that’s around the same height as the mast of the flag, which spans $170 to $210.
The 100 SMA is safely below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. This suggests that the selloff is more likely to resume than to reverse. In addition, the moving averages are close to the triangle bottom to add to its strength as resistance in case of a pullback.
Stochastic has some room to climb after recently pulling out of the oversold region. This suggests that buyers might still have some energy for a correction to nearby areas of interest. However, there is also a downward crossover to signal a return in selling pressure.
Ethereum and its peers have had a rough ride in the previous week, with this particular altcoin being overtaken by Ripple in rankings based on market cap. Although there is institutional investment to be seen next year, many doubt that it could be as strong as initially anticipated due to the uncertainties in the industry.
Many pin the blame for the recent slide on the Bitcoin Cash hard fork as the lack of consensus within the mining community would likely lead to the existence of two separate versions. This reminded market watchers that the same issues could come up for other digital assets at some point, and this can’t bode well for investments or applications based on those.