Ethereum was previously trending higher above an ascending trend line on its 1-hour chart but broke below this near-term support level to signal a reversal. Price is currently making a tight consolidation that appears to be a bearish flag.
This is considered a continuation signal, so a break below the support around the $135 area could be enough to spur another leg lower that’s the same height as the flag. The 100 SMA is crossing below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to gain traction from here.
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These moving averages are also close to the trend line to add another layer of resistance in the event of a larger pullback. The flag mast spans $170 to $140, so the resulting drop could be of the same height.
RSI is heading up to indicate that there is some bullish momentum left. This could be enough to take price up to the area of interest around $150 where more sellers might be waiting. Stochastic is already on the move down to reflect the presence of selling momentum.
Ethereum traders are likely starting to liquidate some of their holdings in anticipation of the Constantinople upgrade on February 28. This could lead to big improvements in the network but traders are also wary of the delays in this hard fork over the past months.
Another delay could put more downside pressure on ethereum while pushing through without any glitches could allow it to regain ground. In addition to the Constantinople upgrade, the St. Petersburg update is also schedule to go live at the same time. According to the company’s blog post, ETH holders don’t need to take action to ensure that the upgrade goes smoothly for their holdings.