ETHXBT has been trending lower in the past few weeks as bitcoin investors seem to have regained their confidence. Price is moving inside a descending channel on the 1-hour time frame and is currently bouncing off support.
ETHXBT could pull up to the top of the channel for a correction from the ongoing selloff. Applying the Fib tool on the swing high and low shows that the 61.8% level lines up with the channel resistance and also a former short-term support zone. The 50% level coincides with the 100 SMA dynamic resistance.
Speaking of moving averages, the 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to continue than to reverse. The gap between the moving averages is getting wider to indicate a pickup in bearish pressure. Price is already stalling around the 38.2% Fib around the mid-channel area of interest.
Stochastic is moving up to show that there’s some bullish pressure left but it’s already dipping into the overbought zone to show that buyers are getting tired. RSI is also moving north to indicate that buyers are in control of price action but the oscillator is also nearing the overbought area, which means that selling pressure could return soon. A breakout past the channel resistance, however, could signal that an uptrend might be underway again.
The odds are in favor of more bitcoin price gains, though, as traders are shoring up their confidence in the cryptocurrency these days. Apart from the consensus reached by developers to merge different versions of the software by July 4, the fact that some exchanges and nodes rejected the newer software signals that incompatibility might not be an issue down the line.
This could lead to more profit-taking in long ETHXBT trades as ethereum was probably one of the biggest beneficiaries of the bitcoin slide as hard fork concerns rose in the past few weeks. Zooming out to longer-term time frames shows that ETHXBT might be in the middle of forming a head and shoulders pattern, which is a classic downtrend signal.