ETHXBT is completing a double top pattern visible on its 4-hour time frame. This is a classic downtrend signal, provided that price breaks below the neckline of the formation. Ethereum is consolidating at the moment but a move below this short-term flag formation could confirm that sellers are ready for more.
Bitcoin made a strong upside breakout from a key resistance area last week so the momentum could be in favor of a downside ETHXBT move.
Technical Indicators Signals
A bearish flag pattern can be seen after the sharp selloff in the past few weeks, signaling a continuation of the trend. A long red candle closing below the 0.02200 level could be enough to confirm that bears have regained control. This could take ETHXBT to the next support area at 0.01500.
The 100 SMA is above the 200 SMA on this time frame, though, so the path of least resistance could be to the upside. In that case, a bounce off the current support area could lead to a test of the near-term resistance at 0.02500.
Stochastic is heading north so ETHXBT could follow suit. Similarly, RSI is moving out of the oversold zone to indicate a return in buying momentum. Stronger bullish pressure could even take price back up to the highs near 0.03500. In addition, a bullish divergence can be seen, as RSI made lower lows since late April while price had higher lows.
Bitcoin price has been on a tear as investors flocked to alternative assets when the Chinese government weakened the yuan and implemented capital controls last week. Keep in mind that that the Chinese market accounts for majority of cryptocurrency volume so their sentiment could dictate ETHXBT price action as well.
Congested network concerns in the bitcoin sphere are also keeping price supported against the likes of ethereum and even fiat currencies like the dollar. Still, a look at ethereum price action against the dollar suggests that there is no inherent weakness for the cryptocurrency so far.
Charts from TradingView