ETHXBT Price Technical Analysis: Neat Retracement Opportunity

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ETHXBT is still pulling up from its dive in the last quarter of 2016, forming a small double bottom formation visible on the short-term time frames. On the daily chart, it can be seen that ETHXBT is still trending lower but might be prime for a pullback to an area of interest.

Price broke below the key support at the 0.01500 level in November last year and has since hit lows around the 0.00700 area. Price is now retreating towards the 0.01200 level and could find resistance at the descending trend line connecting the recent highs of price action on the long-term chart.

The 100 SMA has crossed below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is likely to resume rather than reverse. In addition, the 100 SMA lines up with the downtrend line, adding to its strength as a ceiling. The 200 SMA is closer to the 50% Fib and former support level.

RSI is already indicating overbought conditions, which means that buyers are tired from the climb and are ready to let sellers regain control. Stochastic is also in the overbought area and is starting to turn lower, possibly drawing more sellers to the mix.

Zooming in to the 1-hour chart of ETHXBT shows a bit of consolidation going on, as traders are likely booking some profits off the current area of interest or paring long positions in anticipation of another wave lower. Still, a strong upside breakout from the holding pattern could reflect strong bullish momentum that might sustain the climb past the descending trend line.

Bitcoin has been under tremendous downside pressure in the past few days owing to warnings from Chinese monetary authorities to exchanges and clients. According to the government, bitcoin is not currency and shouldn’t be treated as such. In addition, bitcoin investors should be wary of the risks involved. Meanwhile, they also reminded exchanges to comply with KYC and AML checks on its clients, threatening the anonymous nature of bitcoin transactions.

This was accompanied by actual interference by the PBOC in the forex market in order to engineer a spike higher for the yuan, hurting speculators who have been betting on further declines in the local currency. If anything, this demonstrates the power of Chinese officials to influence financial market action so it’s understandable that bitcoin traders are easing up on their trades for now.

Once these concerns fade, ETHXBT could resume its drop on stronger bitcoin demand, especially since uncertainties in global markets could renew demand for alternative assets. At the moment, crude oil price trends, Trump’s inauguration, and Brexit headlines are keeping investors cautious about putting money in traditional markets.

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With an upbringing rooted in deep ethical values, Yashu Gola knows how to put honesty and dedication into his articles. This young and dynamic financial analyst has done his graduation in IT engineering. His interests in financial writing have once brought him to our digital doorsteps. Since then, he has been an integral part of ForexMinute.com and writes the most captivating news-articles on the foreign exchange industry, cryptocurrencies, and medical marijuana trading.