Recent weakness in the cryptocurrency space has brought the broader outlook back into question for the major players, however; Ethereum continues to hold up relatively well. So, while others such as Bitcoin, Ripple, and Litecoin continue to sag, Ethereum is bringing in buyers at a key area of support.
See how positioning changes in cryptocurrencies and other markets can help as a tool to determine price direction on the IG Client Sentiment page.
Ethereum 640/30-area bringing in buying interest
Only a modest amount of selling has been seen lately in ETH/USD, which suggests that if buyers come back into the broader sector it will be the first one to garner attention. There is fairly substantial support down in the 640/630-area. This support zone started back at the end of last year, and has recently received a fair amount of attention.
Yesterday, was just another show of buyers with a strong key-reversal bar shaping up by the end of the session. It was also another close above the 200-day MA, which has been a theme for the last three weeks. Intra-day breaks below, but those breaks have been unstained and recoveries by the end-of-day have developed to keep ETH buoyed.
Support could of course break, and if the sector continues to go south this may soon very well be the case. However, a trough can be found, broadly speaking, ETH/USD is set up to rally. Looking higher, the first level of resistance clocks in at the monthly high at 838, followed by 979.
In the event support breaks, a 'catch-up play' could be in store as buyers throw in the towel along with the rest of the group. Below ~630, there isn't any substantial support for a good distance lower.
Check out this guide to learn more about how to trade Bitcoin and other cryptocurrencies.
ETH/USD Daily Chart (Solid support at its feet)
Helpful Resources for Cryptocurrency Traders
Whether you're a new or experienced cryptocurrency trader, we have several resources to help you; Introduction to bitcoin trading guide , indicator for tracking trader sentiment , and a weekly webinar discussing the latest developments.
---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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