Ethereum has finally crossed over the downward sloping resistance line, albeit on a low volume, which fails to induce any confidence in the breakout. As can be seen from the 2-hour ETH-XBT price chart taken from Kraken exchange, there is no visible surge in volume reading even after the resistance has been taken out.
A major contribution in ETH/XBT price rise is the sudden collapse in Bitcoin price. A free falling Bitcoin will aid this pair. Ethereum is currently trading at 0.00240BTC.
The technical picture suggests that Ethereum will face significant selling pressure 0.00283BTC even if the speculators (or bulls) manage to catapult the price post the low-volume breakout. Let us take a look at the latest technical considerations below.
Ethereum Chart Structure – Earlier, Ethereum had failed on a number of occasions to overpower the bearish pressure imposed by the downward sloping resistance line. But this time, the bulls respected the support taken from the 30-2h simple moving average of 0.0023BTC and crossed this hurdle. The only but a very crucial worrying factor is the missing volume.
Momentum – The Momentum reading has dipped into the negative region, not reflecting the latest breakout. This is another divergence that may spell trouble for Ethereum.
Money Flow Index – The MFI is playing catch up with the price action. The value has now risen to 49.7097.
Relative Strength Index – The 14-2h RSI is at its neutral best with a reading of 51.2642.
Upon a closer investigation of the technical readings, I believe that Ethereum lacks the juice to go much higher from here. Even if it manages to scale higher, market participants should consider exiting their long positions.
As of now, it is very difficult to anticipate the contribution of falling Bitcoin price on this pair. Keeping a close check on the volume will be helpful as well.