Ethereum's (ETH) poor market performance is becoming almost memetic, as it continues to fall at just about every eventful moment within the larger cryptoasset market. The trend of Ethereum dropping when Bitcoin (BTC) both pumps and dumps is seeming to continue, as was evident in the last few days when exactly this has occurred. However, on very long term timeframes, Ethereum is well set up – if it should choose this path – for a rally. And in the short term, as well, we could see a bounce off of support.
We start on a 4-hour ETH/BTC chart compared to Bitcoin’s price action, and see that Ethereum went down twice with Bitcoin and once against it in the last few days. This trend, for Ethereum in particular, has become common in the last couple of months, especially after ETH broke down below levels not seen in years versus Bitcoin.
On a more typical 4-hour chart, we see that ETH has been caught just in a support zone from the regional market structure (derived from August). It has been in oversold conditions here for days, and we see bullish divergences on both the RSI and histogram.
As the EMAs start to catch up with price, we could see at least a relief bounce shortly. Sell volume has also ebbed as the selloff progressed.
Expanding way out to a 3-day chart, we see that a long term setup (potential) is forming. ETH/BTC is nearing a double bottom here, and if Ethereum can hold this support, we could see a significant RSI bull divergence.
However, this is a risky prospect with both the long and short trends still pointing down. On this chart, the histogram has yet to begin contracting back bullish.
The obvious hope is for a long-term bottom on the interminable Ethereum/Bitcoin downtrend, which has long since dipped into 2017 price territory. The possibility looks to be there. But for now we look for a relief bounce at least.
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