Ether’s path of least resistance seems to be moving downwards as the tracked indicator has been rolling in favor of the bearish traders. Katie Stockton, the managing partner and founder of Fairlead Strategies has mentioned that the MACD indicator did flash a sell signal for the very first time ever since it went positive last year. This suggests a major correction may begin in the near term. This was published in a weekly research note last Monday.
Ether Turning Bearish- Does It Bode Well?
For the uninitiated, the Moving average convergence divergence is simply a technical indicator that is used to gauge strength and major trend changes. Most of the chart analysts have been considering a move that goes below zero in order to bring out a slightly bearish shift in the momentum.
This would result in a movement of Ether into positive territory- waiting for the bullish reversal signal. Interestingly, it isn’t just the MACD that has gone below the point of zero but it is now at its most negative point ever since September 2018. This implies that the strong bearish bias has been going on for quite some time now.
Along with Ether, the MACD for bitcoin did turn bearish last April- which signals scope for a massive sell-off. But there is a difference- back then Bitcoin was trundling along at over $50,000. Prices fell in May to around 35%, where they hit a low of around $30,000. The native token for Ethereum blockchain was working at around $2,500 near press time- which indicates a drop of 3% on the day, along with a decline of 9% throughout a 24-hour basis.
The last drop is quite significant, as it follows multiple bull failures at the moving average price over the 50 days hurdle in the last couple of weeks. The SMA of 50 days, currently, resides at a point just above $2,900 for Ether.