The sharp jump in Ethereum to 0.0021BTC was due to a swift decline in bitcoin price from above-$440 to $410. But with bitcoin now rising to $424, Ethereum has slowly and steadily reduced the gains to 0.0020BTC. Therefore, I do not lay much emphasis on the fact that Ethereum has violated the downward trendline joining the peaks of the past two weeks.
As bitcoin remains undecided about the future course of action, I do not expect major deviations in Ethereum as well.
Now, let us take a look at the latest technical indications from the 4-h ETH-XBT price chart taken from KRAKEN exchange.
Chart Structure – Ethereum is now trading with a bearish bias, and may attempt to retest the breached downward sloping resistance line. The change in polarity makes the trendline an immediate support, which calculates out to be 0.0019BTC.
Bollinger Bands – The 20 4-h SMA of 0.0020BTC is currently sustaining Ethereum. My expectation is that the lower range of the BB at 0.0019BTC will be tested in the coming sessions.
Momentum – The Momentum indicator has yet again turned bearish, reflecting the underlying pessimism.
Money Flow Index – The MFI has retraced its steps after kissing the overbought territory. The current value of the 4-h MFI is 70.8368.
Relative Strength Index – The RSI is currently showing a neutral scenario with a value of 50.5867.
Ethereum remains as weak as before, therefore, my advice would be to short the pair at current levels or on higher valuations by placing a tight stop-loss above 0.0021BTC. If Bitcoin breaks the strong floor of $400, only then do I expect the pair to cross 0.0021BTC. But, I do not see that happening anytime soon.
Therefore, market participants should continue to build short positions as Ethereum will most likely touch 0.0019BTC in the coming sessions.