ETHXBT is trending lower on its 4-hour time frame, moving inside a descending channel and just bouncing off the resistance. Price seems to be on its way down to the channel support at 0.01000.
The 100 SMA just crossed below the 200 SMA on this time frame to show that the path of least resistance is to the downside. In addition, the 100 SMA coincides with the channel resistance, adding to its strength as a ceiling in the event of another pullback from the drop.
RSI is making its way out of the oversold zone to suggest that buying pressure could return. In that case, another bounce up to the 0.01100 area could take place. Stochastic is also indicating oversold conditions so sellers might book profits off the recent slide and let buyers take over once the oscillator heads back up.
Reports that Chinese monetary authorities had a closed-door meeting with bitcoin exchange owners this week put downside pressure on bitcoin prices but it looks like this particular cryptocurrency remains well-bid against ethereum. On the longer-term time frames, ETHXBT remains in a steady downtrend and is currently testing the descending trend line resistance.
Still, bitcoin traders appear uneasy with the goings-on in China, worried that an announcement on strict regulation could happen anytime soon. Prior to this, exchanges were prompted to increase transactions costs or cease offering leveraged bitcoin accounts to manage the risks involved in trading.
Volume has been slightly lower for bitcoin pairs as a result, including ETHXBT. Because of that, tighter consolidation has taken place and price has been unable to sustain the strong trends like it did before. Still, traders continue to keep close tabs on bitcoin industry updates from China to gauge where the cryptocurrency might be headed.
As for ethereum, this digital currency is still in the middle of reinventing its blockchain and is riding on its “proof of stake” which could affect how the network forms a consensus. This protocol has been applied by several other projects such as peercoin but the transition with the current ethereum network might be a challenge.
For now, developers are waiting on developments from an idea called “Casper” which has been described as “consensus by bet.” Ethereum founder Buterin mentioned that there is no hard deadline for this shift but suggested that it may be completed late this year. Until then, bitcoin could be the main driver of price action for this pair and this could hinge a lot on overall market sentiment and Chinese updates.
Geopolitical risks in the West, specifically the Trump administration and upcoming Brexit negotiations, continue to draw investors to this asset versus traditional markets like stocks and currencies.