ETHXBT has formed lower highs and found support at 0.03500, creating a descending triangle formation. Price is at the peak of the triangle so a break in either direction could be due.
The chart pattern is approximately 600 points tall so a resulting breakout could last by the same amount, taking ETHXBT up to 0.04200 on a move higher or to 0.02900 on a breakdown. The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In other words, a break lower could have a higher chance of happening than an upside breakout.
Apart from that, the 100 SMA is in line with the triangle resistance, adding to its strength as a ceiling. A move up could find resistance at the 200 SMA dynamic inflection point around 0.03800.
However, stochastic is turning up to suggest that buyers are taking control of price action. RSI, on the other hand, is heading lower so ETHXBT might follow suit.
Bitcoin is being supported by reports that Russia could accept the cryptocurrency as an official means of payment by next year, indicating a complete shift in their earlier stance on bitcoin. Recall that Russian authorities have taken moves to ban bitcoin trading and websites in the country.
If it does push through, bitcoin could enjoy a wider market, perhaps even making up for lost liquidity in China as investors in the country remain wary of potential government restrictions. Earlier this year, officials conducted investigations on bitcoin platforms in China and even led some to impose higher margin requirements or temporarily halt client withdrawals.
Acceptance in Russia could also follow after Japan’s recent decision to accept bitcoin as a legal form of payment, especially after the network hard fork issues had been resolved. Developers will also merge existing versions of the software by July 4 to prevent incompatibilities, further enhancing confidence in bitcoin.
Besides, bitcoin remains the cryptocurrency of choice as risk-off flows increase. Although it is a riskier and higher-yielding asset, traders appear to prefer this versus traditional securities in times of risk aversion. These days, headlines on terror attacks and geopolitical tensions in several regions continue to keep investors on edge.
As for ethereum, reports that an exchange bug could’ve potentially emptied several ethereum accounts are weighing on this particular digital currency. If concerns continue to stay in play, ETHXBT could see further downside and have enough volatility to head below the triangle support. Keep in mind that the Holy Week holidays could leave price action sensitive to headlines and even small positions.