ETHXBT Technical Analysis: Another Bullish Flag?

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ETHXBT is consolidating in a short-term triangle pattern once more but this could be another trend continuation signal. Ethereum has been able to take advantage of the drop in bitcoin price recently, as the latter is approaching a hard fork in the network.

Ethereum has already undergone a hard fork and has managed to continue so investors are more confidence in putting funds in this digital currency at this point. In contrast, the debate is still going for bitcoin and exchanges have already started issuing statements on how they might not be able to support different versions of the cryptocurrency.

For instance, HitBTC wrote that “Bitcoin Unlimited has been listed on the platform and is available for trading from March 24. The exact date of the hard fork is currently unknown and BTC and BTU withdrawals are temporarily locked due to the probable replay attack which may occur after the split. Withdrawals will be unlocked soon after the hard fork is complete.”

Other exchanges such as Bitfinex, Bitstamp, BTCC, Bitso, Bitsquare, Bitonic, Bitbank, Coinfloor, Coincheck, itBit, QuadrigaCX, Bitt, Bittrex, Kraken, Ripio, ShapeShift, The Rock Trading and Zaif noted that two versions of bitcoin implementation cannot co-exist and are looking into contingency plans for eventualities.

This has sparked a lot of profit-taking for bitcoin, especially since it is still under investigation for use in money-laundering in China. Authorities have yet to announce any official regulations but investors are understandably wary.

On the 1-hour chart, the 100 SMA is above the 200 SMA for ETHXBT. This signals that the path of least resistance is to the upside and the growing gap between the two moving averages shows that bullish pressure is increasing. Also the 100 SMA is close to the short-term triangle or flag, adding to its strength as a floor.

An upside breakout past the triangle resistance could confirm that bulls are gaining traction once more and that new highs are in the cards. Stochastic has moved lower but is already in the oversold region, which reflects exhaustion among sellers. Turning higher could draw more buyers to the mix and support an upside breakout and resulting rally.

RSI is on the move down to show that there’s some selling pressure left. However, this oscillator is also nearing the oversold region to show a reduction in bearish momentum and a potential return in bullish pressure. A break below the triangle support could simply inspire a corrective wave, which might attract more buyers at cheaper levels.

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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.