Ethereum recently broke below an ascending channel to signal that a downtrend is due. Price has since pulled up for a retest and the correction seems to be over.
With that, price could be ready to resume its new trend and the Fibonacci extension tool shows the next potential downside targets. The 38.2% level lines up with the swing low and might be the first take-profit point. The 50% extension is closer to the $102 major psychological level and the 61.8% level is just above $100. The 78.6% level is at $98.60 and the full extension is at $96.11.
The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is more likely to gain traction than to reverse. Price is hovering around the 100 SMA dynamic inflection point which might keep gains in check, but another pullback could still hit resistance at the 200 SMA dynamic inflection point.
RSI is pointing up to signal that there still may be some buying pressure left. This could allow bulls to keep the correction going until overbought conditions are seen. Stochastic is also pulling up after recently hitting the oversold region and has plenty of room to climb before indicating overbought conditions.
Cryptocurrencies are on shaky footing recently and some of the selloff and slow action is being blamed on the Chinese market holidays. Volatility could pick up near the weekend and the start of the following week as traders return to their desks and react to the latest developments.
On the ethereum front, there seem to be no major updates other than Binance’s plans to move away from this digital asset as it prepares to launch a decentralized exchange. An analyst has also predicted that ethereum could surge back to $200 but not before dipping much lower first.
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