Ethereum has formed lower highs and slightly lower lows to create a falling wedge pattern on its 4-hour time frame. Price is currently testing support and still deciding whether to make a bounce back to the top or to break lower.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that support might be more likely to break than to hold. Also, the 100 SMA lines up with the top of the wedge to add to its strength as a ceiling.
RSI is on the move up, though, so buyers may just be getting back on their feet. In that case, support around $400 could hold and ethereum could make its way back up to the resistance near $450 to $470. A break higher could hit the dynamic resistance at the 200 SMA before heading further north.
Stochastic is also making its way out of the oversold region to indicate that bulls are regaining the upper hand. Both oscillators have room to climb before hitting the overbought level, which means that buyers could stay in control for a bit longer.
Interest in the cryptocurrency industry is returning as the SEC is reportedly seeking comments on another bitcoin ETF to be listed on the Cboe. Also, CoinMarketCap reported that the Dominance Index is showing a pickup in bitcoin.
This typically happens when investors seek alternative higher-yielding investments outside of traditional markets like stocks and commodities. These days, trade war troubles are hurting returns for the latter so it’s understandable that other types of riskier assets like digital currencies are more appealing.
As for ethereum itself, this digital asset could continue to bank on hopes of dodging regulation, as a senior SEC official previously mentioned that it shouldn’t be treated as a security.