Ethereum finally made an upside break above the double bottom reversal pattern previously highlighted. The chart pattern spans $400 to $500 so the resulting climb could be of the same height, possibly taking Ethereum to $600 next.
However, the 100 SMA is still below the longer-term 200 SMA to suggest that the path of least resistance is to the downside. This means that the selloff is more likely to resume than to reverse.
Then again, the gap between the moving averages has narrowed enough to signal weakening bearish momentum. A bullish crossover could be imminent and this would likely draw more buyers to hop in and sustain the rise.
RSI is indicating overbought conditions, though, so selling pressure could still return. Either that or buyers could book profits at nearby resistance levels and trigger a dip. Similarly stochastic hit overbought levels and might be ready to head south soon, dragging Ethereum along with it.
Still, news of institutional interest in the cryptocurrency space has been enough to shore up Ethereum prices as traders got wind of reports that BlackRock formed a team to investigate opportunities in the industry. Although its CEO clarified that it’s not seeing significant investor demand yet, the fact that the world’s largest asset manager is looking into crypto is enough to encourage both retail and institutional demand.
The dollar drew strong support from Powell’s remarks but proved no match to Ethereum strength, which suggests that the pickup in risk appetite is very strong. This could be enough to keep investors optimistic that the industry could sustain a rebound in the coming months after a rough Q2.
Traders also appear more upbeat about regulatory developments in the US and abroad, seeing these as factors that could support the legitimacy and security of the industry. Of course headlines and changes in sentiment could still determine whether this climb can carry on or not.