Ethereum is still inside a symmetrical triangle formation as it formed another lower high when it bounced from the $300 resistance. Price now seems to be aiming for the bottom of the triangle around $280 and the moving averages.
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. This suggests that support is more likely to hold than to break, possibly leading to yet another move to the top.
However, RSI is heading lower so ethereum might follow suit while sellers have the upper hand. Stochastic is also pointing down to reflect the presence of selling pressure. If bears are strong enough, they could push for a break of support and a downtrend that’s the same size as the triangle.
But when both oscillators reach oversold conditions and turn back up by then, buying pressure could return and lead to another test or even a break past the top.
The recent tweet by Elon Musk on how he wants ethereum “even if it’s a scam” is being blamed for the drop in price, although it’s tough to pinpoint which exact catalyst allowed price to turn from $300. After all, it could simply be profit-taking once more at the key psychological mark and a confirmation of a short-term double top right there.
In more upbeat reports, ethereum has been integrated by Yahoo Finance into its platform for trading. Some say that this marks an important step in crypto adoption, especially for retail investors, but others think that this could increase downside pressure.
In the meantime cryptocurrencies could also wait for clues on market sentiment when it comes to establishing longer-term direction. Risk appetite on account of trade developments is currently supporting stocks and commodities, possibly weighing on demand for ethereum and its peers.