In the last 24 hours, Ethereum is down 7.5 percent as Bitcoin has started to slip from its weekend peak. ETH is now trading around $600.
In the weeks ahead, analysts think Ethereum will resume its decline. On December 21st, the chart below was shared by a leading trader. As a key indicator hits a peak, it shows that Ethereum is on the verge of breaking below the $600-630 technical support.
The indicator in question is the Stochastic Relative Strength Index (RSI), a common indicator that question the strength of developments in the economy. As Investopedia clarifies: “The StochRSI oscillator was developed to take advantage of both momentum indicators in order to create a more sensitive indicator that is attuned to a specific security’s historical performance rather than a generalized analysis of price change.”
In the weeks ahead, Ethereum could jump lower, the trader who posted the chart below said. As he was explaining: “Is bullish but…. I’m looking for a correction over the coming weeks and months (much depends on BTC of course and ETHBTC) Weekly Stoch RSI has been nailing tops on eth. ‘It’s not the thinking that makes the money, it’s the sitting and waiting that makes the money.”
Each of the last two times the Stochastic RSI of Ethereum looked as it did now, strong corrections of dozens of percent have been seen. Though, during times in the bull run of 2017, Ethereum’s Stochastic RSI remained in “overbought” territory.
all eyes should be on Bitcoin, analysts say, as a reversal in the leading cryptocurrency could spark a rally in ETH. JPMorgan analysts said that institutional fund flows could sustain bullish price action while they noticed the recent Bearish price action. Bloomberg recently wrote on the BTC and cryptocurrency analysts note: “While it’s hard to avoid describing Bitcoin as “overbought,” the flows into the trust ‘are too big to allow any position unwinding by momentum traders to create sustained negative price dynamics’, the strategists said. A major slowdown in those flows would boost the risk of a Bitcoin correction akin to the one in the second half of 2019, they said.”