ETHXBT made a bit of a climb these days, allowing a larger correction visible on the 4-hour chart to materialize. Price is still trading inside a long-term descending channel and is currently testing the resistance, perhaps deciding whether to make a bounce or a break.
The channel resistance lines up with the 100 SMA dynamic resistance, which appears to be keeping gains in check for the time being. This moving average is below the longer-term 200 SMA, indicating that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse.
RSI is on the move down to show that sellers are taking control of ETHXBT price action, possibly pushing it down to the support at 0.00800 or lower. Stochastic is moving up though, indicating that there’s still some buying pressure left, possibly taking price up for a test of the dynamic resistance at the 200 SMA.
Price is still safely below the long-term floor visible on the daily chart so there’s a strong chance that the slide could carry on. A larger pullback could last until the broken support at the 0.01400 to 0.01500 area, though, as profit-taking could come into play towards the end of the year.
Ethereum has suffered a considerable decline in volume and price over the past few months, plagued by network attacks that threatened the security of its blockchain. However, a few adjustments and a hard fork were introduced, yet these didn’t seem to shore price up for very long.
Meanwhile, bitcoin continues to be driven by inflows and outflows from China. News that the government is restricting offshore investments led traders to book some profits off bitcoin rallies but reopened their long positions later on when they realized that bitcoin activity isn’t likely to be restricted. At the same time, the persistent threat of yuan devaluation from Chinese monetary authorities is encouraging investors to pursue higher returns with bitcoin.
Still, a few positive developments in the ethereum arena have lifted this particular cryptocurrency, although it probably won’t be long before bitcoin bulls spot this opportunity to short ETHXBT at slightly higher levels. Take note, however, that ethereum creators are looking at the next stage of development for the cryptocurrency which might be enough to shore up its value.
In a blog post, Vitalik Buterin detailed “Metropolis” or the next major hard fork for ethereum, which is expected to include a series of small improvements to the protocol, which are altogether much more substantial than Homestead. He introduced the term “abstraction” to refer to reducing client complexity and the long-run risk of consensus and making hard forks easier and safer by having as much of the Ethereum protocol’s logic as possible into the EVM itself instead of having complex protocol rules governing contract creation, transaction validation, mining and various other aspects of the system’s behavior.