ETHXBT is currently consolidating in a short-term symmetrical triangle formation, which looks like a bullish flag when viewed on longer-term charts. Price has formed lower highs since March 17 and created higher lows as well.
Ethereum is testing the triangle support against bitcoin at the moment but technical indicators are showing that the support could hold. The 100 SMA is above the longer-term 200 SMA, confirming that the path of least resistance is to the upside or that a bounce is more likely than a break. Also, the moving average lines up with the triangle support, adding to its strength as a floor.
A larger dip could last until the 200 SMA dynamic support at 0.03500, which is also an area of interest. If so, ETHXBT could form a descending triangle instead, which is still a consolidation pattern and potential continuation signal. Ethereum has been able to take advantage of bitcoin weakness, especially since there are several concerns surrounding the hard fork debate.
Stochastic is on the move down so there is some bearish pressure in play. RSI is also heading south so ETHXBT could follow suit. However, both oscillators are indicating oversold conditions and could turn higher, drawing buyers back to the game. In that case, another test of the triangle resistance could be in the cards and perhaps an upside break.
A breakout in either direction could last by around 0.01000 points or the same height as the triangle formation. It’s worth noting that ETHXBT is coming off a strong rally since March 15 so there is an uptrend going on. Zooming out to longer-term charts shows that ETHXBT volatility picked up after price broke out of a range pattern, bringing price to record highs.
For now, investors seem to be waiting for the next batch of catalysts. The absence of fresh upside moves could lead to some profit-taking, offering more buyers to get in a correction at better prices. Bitcoin is currently facing the threat of increased regulation, particularly in China, so this could dampen demand for the cryptocurrency.
Analysts have pointed out that it’s not so much about positive developments in the ethereum network but more on the drastic selloff in bitcoin that has spurred ETHXBT’s gain. After all, there are mounting concerns that the bitcoin network would have no choice but to undergo a split or hard fork, which would then result to two different kinds of cryptocurrency being traded, thereby weakening the stability of the network.