Ethereum is trending lower in a descending channel and has bounced off the bottom recently. Price is currently testing the mid-channel area of interest and sustained bullish pressure could take it to the top.
However, the channel top lines up with the 100 SMA dynamic inflection point that adds to its strength as a ceiling. This short-term moving average is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the downtrend is more likely to resume than to reverse.
RSI appears to be on the move up, though, so there’s a chance that buyers could stay in control and push for a move past the channel top. From there, ethereum could still hit a roadblock at the 200 SMA dynamic inflection point.
Stochastic is on the move down to signal that sellers have the upper hand. In that case, ethereum could make another test of the channel bottom near the $400 level or even break lower.
Dollar strength came into play late last week when the Trump administration announced their tariffs on China. Beijing has retaliated with higher tariffs on US exports, so many are currently concerned about this trade war and its impact on the global economy.
However, ethereum managed to hold its ground, possibly still drawing support from remarks by a senior SEC official on how it’s not a security to be regulated like bonds or stocks.
Still, it’s worth noting that US regulators have an ongoing probe into price manipulation in the cryptocurrency industry and the results could further undermine trust. Also keep in mind that those remarks don’t constitute an official ruling for the SEC just yet.
Looking ahead, there are several events this week that could push market sentiment around, which could then affect demand for the dollar and riskier assets like ethereum.