Ethereum is trading below a long-term descending trend line but has formed higher lows since late June. In addition, a bullish divergence can be seen as price recently made lower lows while oscillators drew higher lows.

RSI has some room to climb so ethereum could follow suit until the oscillator reaches overbought levels and turns back down. Stochastic has already climbed to the overbought zone and might turn lower soon to indicate a return in selling pressure.

The 100 SMA recently crossed below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This means that the downtrend is more likely to resume than to reverse. In addition, the moving averages could hold as nearby dynamic inflection points below the trend line also.

Cryptocurrencies were weighed down by a slew of negative industry updates for the most part of the week, erasing more than half of the gains seen last week. Investors were likely spooked by negative remarks from Stiglitz and Roubini while the hack on Bancor also didn’t help.

Perhaps what’s propping ethereum slightly higher compared to its peers is the news that it could move on to the second phase of its blockchain. According to Joe Lubin in a panel interview, this would feature greater scalability on top of the trust layer in the first phase. He cited:

“We’re moving into a space where Ethereum can serve as the layer one trust system, and built into Ethereum we’ll have hundreds of thousands of transactions in the layer two systems and we’re going to see that ramified this year.”

This would then bring further applications for the ethereum blockchain while also suggesting a “more developed differentiation” for regulating cryptocurrencies. Recall that a senior SEC official previously mentioned that ethereum shouldn’t be treated as a security like stocks and commodities.

The post Ethereum (ETH) Price Analysis: Bullish Divergence Spotted! appeared first on Ethereum World News.

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