ETHXBT is still inside its symmetrical triangle formation visible on the 4-hour time frame. Support appears to be holding, as a short-term uptrend signal has formed. If you look closer, you’d see a small double bottom formation right on the triangle support, signaling that further gains are in the cards. However, ETHXBT has yet to break past the neckline of the formation before confirming that a rally is set to take place.
The moving averages are holding as dynamic inflection points for now and the 100 SMA appears ready to cross below the 200 SMA. This could be a bearish signal, potentially sending ETHXBT for another test of support at 0.02350. A break below this level could spur a longer-term slide for ETHXBT.
Stochastic is on the move up, which means that buyers have enough energy to push for a test of the triangle resistance around 0.03000. Stronger bullish momentum might even spur an upside breakout and a longer-term rally. RSI is also heading north so ETHXBT could follow suit.
Bitcoin has also been stuck in consolidation against most of its counterparts as traders are holding off after the recent strong rallies. In addition, investors might be booking profits off their recent positions from here. Market watchers are still on the lookout for the next big catalyst, possibly in the form of the June FOMC statement or the EU referendum.
Keep in mind that the recent surge in bitcoin was spurred by Chinese investors moving their funds to cryptocurrencies on reports of yuan weakening and government capital controls. However, other digital currencies like ethereum could hold a candle to bitcoin rallies since the latter’s network is reportedly congested.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
