ETHXBT Price Technical Analysis – Broken Wedge Correction

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ETHXBT recently broke below support of the rising wedge formation visible on its 4-hour time frame. Price bounced off 0.01800 and showed signs of a correction, and applying the Fib tool on the latest swing high and low shows that the 50% level lines up with the broken wedge support around 0.02100.

The 100 SMA crossed below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. Price seems to be testing the dynamic resistance at the 100 SMA for now, although a higher pullback seems possible. The 200 SMA is closer to the bottom of the wedge and Fib levels, which might act as the line in the sand for any correction.

If the Fib levels hold as resistance, ETHXBT could resume its drop to the swing low or much lower. Note that the wedge spans 0.01400 to 0.02400 so the resulting selloff could last by the same height, taking price down to the 0.01000 area.

Stochastic is moving up but is already in the overbought zone, indicating that buyers are losing steam. Similarly, RSI is nearing the overbought area and might turn lower to indicate a return in bearish pressure.

Ethereum has been sliding against bitcoin after weaknesses in its blockchain were exposed recently. Meanwhile, bitcoin has been holding steady against most of its counterparts as investors wait for more direction clues. Still, BTC has been able to hold on to most of its gains as traders seek higher returns.

Ethereum developers have been set on introducing hard forks in order to prevent further hacks, although trust in the system has considerably dipped recently. With that, the path of least resistance for this cryptocurrency is indeed to the downside for the time being unless any updates alter this sentiment.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.