ETHXBT was previously consolidating inside a descending triangle pattern before finally making a break lower. This signals that sellers are taking control of price action, likely leading to more declines for ethereum against bitcoin.
Risk aversion seems to be weighing on financial markets once more, dragging bitcoin lower against the dollar but higher against its other cryptocurrency rivals. Weaker oil prices are preventing traders from taking on more risk while the looming central bank decisions are also contributing to uncertainty. The Japanese government is set to print details of its economic stimulus plan today as well.
The 100 SMA is below the 200 SMA, confirming that the path of least resistance is to the downside. RSI is heading south so ETHXBT could follow suit. For now, a pullback to the broken triangle support appears to have taken place, allowing sellers to get in at a better price. However, stochastic is on the move up, suggesting that buyers could regain control.
With this downside breakout, ETHXBT could be aiming for the next support at the 0.01600 handle then at 0.1500. Price seems to have bounced off the area of interest at the 0.01700 area for the time being, waiting for more bearish momentum to continue its drop.
Market catalysts for the rest of the week include the crude oil inventories data which could continue to affect commodity prices and overall market sentiment. The BOE is still set to make its policy decision on Thursday and might decide to lower interest rates just as the RBA did so earlier today.
A sudden shift in market sentiment could allow ethereum to recover against bitcoin but so far there seem to be no events or potential catalysts that could trigger that change.