Ethereum (ETH) continues to be in a strong downtrend on the ETH/USD daily chart, having faced a rejection at the upper limit of the resistance line in May. The price has yet to find a bottom but it is getting closer to the lower limit of the ascending channel. If Ethereum (ETH) continues to trade at its current pace, it is likely to find a bottom around September at the latest. Ethereum (ETH) being the largest cryptocurrency platform and the second largest coin by market cap also serves as an indicator of the price action of the rest of the altcoin market.
RSI conditions for ETH/USD are back to normal but given the present outlook of the market, further downside is likely till Ethereum (ETH) finds a bottom. Wave trend analysis for Ethereum against the US Dollar also shows that it missed a chance to break out of the downtrend and is now expected to fall lower in the days ahead. Ever since the beginning of this correction, Ethereum (ETH) unlike Bitcoin (BTC) has respected one clear downtrend line without any breakout. The most plausible explanation for this is that Ethereum (ETH) unlike Bitcoin (BTC) has not been a victim of Futures manipulation. While it is true that this correction would have taken place even without Bitcoin Futures, it is also true that Bitcoin Futures offered by CME and CBOE have determined the timing, structure and momentum of this correction.
As far as the altcoin market is considered, Ethereum (ETH) continues to be a plausible indicator of the overall price action. The downtrend resistance line has held on consistently and has not been breached once. EMA alignment for ETH/USD continues to remain bearish but it would not take much to turn the tables in favor of the bulls at this point. It is true that further downside is possible and likely at this point but the magnitude of losses and the momentum of downward movement seem to be decreasing with every passing day. The volume is also dwindling and as Ethereum (ETH) continues to trade lower into the ascending channel, it becomes easier for the bull to break out of the downtrend by breaking past the resistance line.
Price action of the ETH/BTC chart shows that Ethereum (ETH) is preparing for a massive breakout against Bitcoin (BTC). RSI for ETH/BTC is trading in a falling wedge that extends all the way to the month of September. It means that Ethereum (ETH) correction might come to an end before September. This would also coincide with the prediction of top industry analysts like Tom Lee of Fundstrat who expect a bull run later this year. As we saw last year, Ethereum (ETH)’s bull run along with that of most altcoins began in mid October and extended all the way to December before a correction kicked in. Technical indicators favor the odds of such an event materializing again later this year. This would mark the end of this correction as Ethereum (ETH) and most altcoins make new highs for the year.