ETHXBT has been trading inside an ascending channel pattern on its 1-hour chart and recently dipped below support. However, this move proved to be a fakeout on stronger volatility as price is back inside the channel.
ETHXBT could be due to head back up to the channel resistance around 0.06500 from here as the uptrend remains intact. Also, the 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. These moving averages are close to the channel support as well.
Stochastic has turned up from the oversold area to reflect a pickup in buying pressure. This could stay in play until the oscillator reaches the overbought zone and turns back down. RSI is also on the move up so ETHXBT could follow suit.
Both cryptocurrencies are enjoying strong support at the moment as ethereum has gained a lot of backing from financial institutions exploring its potential applications. Meanwhile, bitcoin is also being supported by expectations of SEC approval for the bitcoin COIN ETF by the Winklevoss twins.
Recall that these expectations have provided a lot of support for bitcoin price earlier this year since approval would mean greater market interest and access, therefore stronger liquidity and volumes. The regulator previously denied the request on the grounds that bitcoin is traded in mostly unregulated markets, but the Japanese government’s decision to officially recognize bitcoin as a legal form of payment could change all that.
In any case, a SEC decision to reject the application even with additional requirements submitted could mean bitcoin weakness and render ethereum stronger. The ether token has passed $100 for the first time in history as it continues to gain traction among innovators and firms.
If this momentum keeps up, ETHXBT could be on its way to breaking past the 1-hour channel resistance and starting a steeper rally. On the other hand, a break below the channel support at 0.05600 could set off a larger correction for the pair.