Ethereum (ETH) is still in a strong downtrend. The price has failed even to get past the 50 EMA since June as can be seen in the chart for ETH/USD above. The EMA alignment is strongly bullish and the RSI signals more downside to come in the days ahead. Â The RSI has just fallen below its EMA which means the price is likely to pullback sharply in the near future. Since the beginning of this correction, Ethereum (ETH) has completed two successful cycles of upwards and downwards movement within the wedge it is trading in.
The price touched the bottom of this wedge in December 2017 and then touched the top of this wedge around January 2018. Since then, the price has corrected all the way to the bottom of the wedge, touching the support line around April this year. Afterwards, it shot up within the same month to touch the top of the wedge again in the month of May. Currently, the price is now once again in free fall in search for a bottom. Having rejected the 50 EMA, the price seems to be heading down more aggressively than previously anticipated. This might have a lot to do with recent rumors of a Bitcoin (BTC) ETF which have convinced investors to pull most of their funds even from top coins like Ethereum (ETH) in order to profit off an ETF rally.
Earlier this month, it was expected that Ethereum (ETH) might find a bottom within the month of July as some cryptocurrencies like Ripple (XRP) exhibited a price action that completely replicated price action of previous cycles. In normal circumstances, it could thus have been deduced that the correction might take around ten days from this point as the market will effectively complete a cycle. However, given that markets behave unreasonably most of the time, it is plausible to expect that growing Bitcoin (BTC) dominance due to growing interest in Bitcoin (BTC) might have adverse effects on other cryptocurrencies, including Ethereum (ETH). It is therefore likely that Ethereum (ETH) might yet take some time before finding a bottom.
Ethereum (ETH) is trading well against BItcoin (BTC) and seems to be getting closer to finding a bottom according to the chart for ETH/BTC above. So far, Ethereum (ETH) has held on to a strong support line against Bitcoin (BTC) but if the sentiment shifts heavily in favor of Bitcoin (BTC) in the days ahead, it would not be surprising to see Ethereum (ETH) break market structure. RSI for ETH/BTC will find a bottom yet in the days ahead but significant downside does not seem likely as oversold conditions appear on the RSI. Conditions for a market bottom are also favorable according to the chart above and it is likely that Ethereum (ETH) might find a bottom in the month of August.Â It is important to note though that before a bottom is found, Ethereum is likely to continue with its aggressive downtrend for the next few weeks.