Ethereum is testing support at the ascending channel bottom and might bounce back. Ethereum is trading inside an ascending channel visible on its 1-hour time frame and is currently testing support. If this continues to keep losses in check, price could make its way back to the top of the channel.
Applying the Fibonacci extension tool also shows other potential upside targets. In particular, the 38.2% level lines up with the mid-channel area of interest that may contain take-profit orders. The 50% extension lines up with the swing high around $250 and the 78.6% level lines up with the channel resistance. The full extension is located around $280.
The 100 SMA is safely above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. The gap between the two is widening to reflect strengthening bullish momentum and the 200 SMA lines up with the bottom of the channel to add to its strength as support.
Stochastic is on the move down to suggest that selling pressure is in play. RSI is also heading lower to signal bearish pressure but is dipping into oversold territory. This suggests that bears might feel exhausted soon and allow buyers to take over, leading to a bounce off the current levels.
Ethereum has regained its spot in the top two ranking of cryptocurrency market cap as it was briefly outpaced by Ripple in the latest rally. This could be enough to keep this particular digital asset supported versus the dollar and its altcoin peers.
The recent dip can’t seem to be tied to any major catalyst specific to ethereum as other altcoins also chalked up sharp declines over the past 24 hours. This might be due to a correction from the recent climb, but a break below the channel support around $220 could signal that a deeper decline is in order.
