Ethereum Still Holding Support, But Pushing Limits — Price Analysis

  • LTF (Low timeframe) trend: Looking down and testing support(s)
  • MTF trend: A would-be bull flag is looking more exposed today
  • HTF trend: General downtrend not being challenged yet

Yesterday, we elaborated a bullish outlook for Ethereum (ETH), with multiple positive signs on MTF and HTF charts. Today, ETH is still holding within a MTF bull flag, although the signs are changing somewhat to a slightly less bullish picture on LTF charts.

Starting on the daily ETH/Bitcoin, we see that Ethereum is selling off to the bottom of the blue support band. In doing so, it’s testing the 21 and 55 EMAs, but holding so far.

Calling all bullsETH chart by TradingView

The histogram here looks a bit scary, taking a sharp turn down instead of what could have been a stabilizing flat or arch.

The RSI trendline, pictured below, is also looking a bit scary. This line is breaking at time of writing, although the trading day is just over half over and there is still time for buyers to step in and hold this.

Trendline breakingETH chart by TradingView

On the ETH/Dollar daily we see a slightly rosier picture, although here too the signs are mixed. Price has continued to rise within what looks like a bull flag, positioned just above the very critical $160 mark. This is a result of Bitcoin’s LTF uptrend in the past couple of days, which is inflating ETH’s price even as ETH/Bitcoin falls.

Holding $160 is importantETH chart by TradingView

We see a bullish histogram arch to the upside, here. But we also see the chance for a clear bearish divergence on the RSI, if price fails to break out of the bull flag channel.

Finally, returning to ETH/Bitcoin on the 4-hour chart, we must acknowledge that bullish HTF charts aside, Ethereum looks a little precarious here. This is because the important support/inflection zone surrounding ₿0.0188 is being retested for the third (major) time in the last couple of weeks; and always with a falling RSI strength which is hard to see as a hidden bullish divergence.

This looks shaky to be sureETH chart by TradingView

What’s more, the 55 EMA has been lost here, which suggests that Ethereum may retrace down toward ₿0.0185 – which is out of the larger support zone shown on the daily chart.

The market has been on fire in the last couple of weeks, because of Bitcoin’s powerful rally. If Bitcoin continues to do well, it will likely inflate Ethereum such that the altcoin at least stays above the critical $160 irrespective of what happens on ETH/BTC. We may be seeing a return to the inverse relationship between ETH and BTC.

The views and opinions expressed here do not reflect those of and do not constitute financial advice. Always do your own research.

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Arca Launches SEC-Approved Digital Securities Fund on Ethereum

Francisco Memoria

Los Angeles-based investment firm Arca is launching the “Arca U.S. Treasury Fund,” a digital securities fund registered with the U.S. Securities and Exchange Commission (SEC), built on top of the Ethereum blockchain.

The shares are called “ArCoin,” and the fund is the first product registered under the Investment Company Act of 1940 to be offered as a digital security.  This is notably the first time the SEC approved a fund based on blockchain technology.

The regulator has been well-known in the cryptocurrency space for repeatedly rejecting bitcoin exchange-traded funds (ETFs).  Rayne Steinberg, Arca’s CEO, commented:

Our announcement today is a ground-breaking and transformative step toward the unification of traditional finance with digital asset investing as this new category of regulated, digital investment products is made available to investors.

Forbes reports the fund will provide interest payments every quarter. The interest will be generated as at least 80% of the assets in its portfolio will be short-term Treasury securities. Assets that are not invested in these securities will be moved to cash, cash equivalents, investment-grade fixed-income securities, or assets Arca determined are of comparable quality.

As the fund is looking to invest in low-risk assets, the net asset value (NAV) of ArCoins is expected to stay relatively stable. The fund will nevertheless provide daily NAV reports, bankruptcy protections, periodic audited financial statements, and assets held in a statutory trust.

The Arca U.S. Treasury Fund was likely approved to be launched on the Ethereum blockchain because it uses the ERC-1404 token standard, which restricts token holders so they can only transact with whitelisted addresses, ensuring the shares are never out of regulatory oversight.

The ERC-20 token standard most tokens launched on the ETH blockchain use, on the other hand, are not restricted and can be moved to any address on the cryptocurrency’s blockchain.

Featured image via Pixabay.