Ethereum was previously trending lower beneath a descending channel and has closed above this falling resistance to signal a pending reversal. Price has also formed higher lows and higher highs to start creating an ascending channel.
Recall that a bullish divergence was highlighted for this cryptocurrency and buyers are now taking action. Price has moved halfway past the mid-channel area of interest to reflect strengthening momentum and could make its way up to the top.
The 100 SMA is below the longer-term 200 SMA on this chart for now, though, so the path of least resistance is to the downside. This suggests that there’s still a chance for the selloff to resume at this point.
However, the gap between the moving averages has narrowed enough to signal an imminent upward crossover. In that case, more bullish pressure could kick in and sustain the climb, even past the channel top at $520.
RSI is hovering around overbought levels to indicate that buyers are exhausted from the climb and may be looking to book profits soon. Stochastic is also indicating overbought conditions and turning south could lead to a return in selling pressure.
In that case, sellers could take over and lead to a dip in Ethereum. Nearby support is located at the broken trend line and channel bottom around $430 to $450.
Cryptocurrencies received a strong boost from news that BlackRock is looking into the industry. Note that this is the world’s largest asset manager and CEO Larry Fink confirmed the news this week.
However, he also cautioned that they’re not seeing a big demand among investors for cryptocurrency. He did clarify that they formed a group to look into potential applications and investment in the industry.
This also comes after reports that Cohen Private Ventures, hedge fund billionaire Steve Cohen’s venture arm, invested in cryptocurrency-focused investment fund Autonomous Partners.