Ethereum is coming close to penetrating to the upside the long-term descending trend line, taken from the peak on January 29.
As long as the downward sloping line remains intact, the market would stay cautiously bearish for the short run. Technically, the RSI indicator is pointing slightly to the downside in the negative territory, while the MACD oscillator is flattening above the trigger line but stands below the zero line in the daily timeframe. Also, the price holds near the 20-simple moving average (SMA) and below the 40-SMA.
If the price decides to jump above the diagonal line, this would open the way towards the 300.00 strong psychological level, taken from the latest highs in August. The area could be difficult for bulls to overcome initially, but if there is a closing candle above this level, the price could challenge the 405.00 resistance barrier.
On the downside, in case of a continuation of the long-term decline, this could open the path towards the September low near the 165.00 handle. Further losses could drive the price south until the 134.00 hurdle, which was the lowest level of July 2017.
To conclude, if the aforementioned resistance (300.00) is violated, this could be seen as a change of the direction in the near term. Otherwise, the Ethereum price could continue moving downwards, confirming the bearish long-term structure.
by Melina Deltas, XM Investment Research Desk
Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities.
Melina studied Pure Mathematics at Lancaster University and has a Master’s Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).