Ethereum was previously consolidating inside a symmetrical triangle pattern before busting below support to signal that bears have won over. In other words, further declines are underway, likely lasting by the same height as the chart formation.
The triangle spans $170 to around $250 so the resulting slide could be around $80 in height. The 100 SMA is still above the longer-term 200 SMA to suggest that the path of least resistance is to the downside or that support might still hold. Then again, moving averages are likely just oscillating and have yet to catch up to the slide.
RSI has fallen to the oversold level, though, indicating that sellers are feeling exhausted. Turning higher could lead to a return in bullish pressure but that doesn’t seem to be happening at the moment. Stochastic is also dipping into oversold territory and looks more ready to pull up. A bit of bullish divergence can also be seen as the oscillator made higher lows while price had lower lows.
Cryptocurrencies all suffered a massive drop and many are blaming the “crypto civil war” due to the Bitcoin Cash hard fork. Keep in mind that the community hasn’t reached a consensus before the split, reviving investor concerns that similar troubles could occur for other digital assets at some point.
Of course there are also those that say that this drop was merely a short-term panic reaction and that the industry has more positive developments to bank on and look forward to. For now, ethereum is down more than 12% over the past 24 hours and has been overtaken by some altcoins at some point in terms of market cap rankings.
For ethereum itself, it can look ahead to institutional inflows with Fidelity’s platform next year and also stricter ICO oversight by the SEC that could prevent panic selloffs in the future.