Ethereum is pulling back after testing support around $480 and could be due for a test of the nearby resistance levels. Applying the Fib retracement tool on the latest swing high and low shows that the 61.8% level lines up with a key area of interest at $640.
Price looks ready to move up to the 50% Fib from here and RSI is suggesting that bulls could stay in control for a bit longer. Stochastic is also moving up but nearing overbought levels to reflect exhaustion among buyers. Turning back down could draw selling pressure in and lead to a move back to the swing low or lower.
The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. This means that the selloff is more likely to continue than to reverse. The gap between the moving averages is widening to reflect stronger selling pressure and the 100 SMA could hold as dynamic resistance soon.
Ethereum Classic has claimed a successful blockchain fork, which further expands the gap between the original version. As Coindesk reported, “The successful network change took place at block 5,900,000, according to available network data and statements from developers involved in the project.”
“There’s a lot of new algorithms being proposed like proof-of-stake, delegated proof-of-stake and byzantine fault tolerance, and within our community we’re not convinced that these newer versions of consensus are any more decentralized and we’re somewhat afraid that they may be more centralized than say proof-of-work.”
Apart from that, other altcoins previously dependent on the ethereum network are due to launch their mainnet this coming month, namely EOS and TRX. Once this pushes through, investors could stop liquidating their ethereum holdings and allow the ongoing trends to resume.