Ethereum was gradually sliding lower inside a falling wedge pattern before breaking past the resistance to signal a potential rally. Price also seems to have completed a quick pullback and is gaining bullish traction.
However, the 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is still to the downside. In other words, the selloff is more likely to resume than to reverse. The 100 SMA is holding as dynamic resistance as well while the 200 SMA dynamic inflection point is just close by at $500.
RSI is pointing down to signal that selling pressure is returning so ethereum might follow suit. Similarly stochastic is heading so price might find itself back inside the wedge pattern and trending lower once more.
The mood in the cryptocurrency industry is still pretty positive so far as traders appear more optimistic that developments could sustain gains until the end of the year. However, some also attribute this to profit-taking or a dead cat bounce off the earlier declines.
Nonetheless, the dollar could take center stage for the rest of the week with the FOMC minutes and NFP report lined up. Hawkish views supported by upbeat jobs data could pave the way for more dollar gains across the board, thereby dragging ETHUSD down.
On the flip side, cautious remarks from several policymakers when it comes to trade uncertainties and the lack of wage growth could keep a lid on dollar rallies. If this is followed by a downbeat NFP figure, ethereum and other digital assets could take advantage of dollar weakness.
On top of all that, trade tensions could also spur demand for alternative assets while stocks and commodities take hits on escalating conflict. Meanwhile, regulatory jitters and another hack on a crypto exchange might be factors that draw ethereum sellers back in.