Ethereum Price Technical Analysis – ETH/USD Support Turned Resistance
Key Highlights
ETH price tumbled and broke a major support at $648-660 against the US Dollar.
This week’s highlighted important bullish trend line with support at $660 was breached on the hourly chart of ETH/USD (data feed via Kraken).
The pair retested the broken support at $648, but it acted as a resistance and prevented gains.
Ethereum price is back in a bearish zone against the US Dollar and bitcoin. ETH/USD has to move back above $645-660 to start a fresh upside wave.
Ethereum Price Resistance
There was a move from well above $675 in ETH price against the US Dollar. The price declined and broke many supports such as $675 and $660. The decline gained pace once there was a break below the $675 support. It dropped by more than $80 and settled below the 100 hourly simple moving average. During the decline, there was a close below a crucial pivot level at $548.
More importantly, this week’s highlighted important bullish trend line with support at $660 was breached on the hourly chart of ETH/USD. There was even a downside spike below $600 and the price traded as low as $595.37. Later, an upside wave was initiated and the price moved above the 23.6% Fib retracement level of the last decline from the $711 high to $595 low. However, the upside move was protected by the previous support at $648. Moreover, the 50% Fib retracement level of the last decline from the $711 high to $595 low also acted as a .
Looking at the , the price seems to be struggling to move back above $648. The stated $648 level was a support earlier and now it is acting as a hurdle. In the short term, there could be ranging moves below $648 before the price makes the next move.
Hourly MACD – The MACD has moved back in the bearish zone.
Hourly RSI – The RSI is now well below the 50 level.
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There are few people who have worked in the blockchain technology space for so long and maintained such a seemingly disinterested and skeptical perspective on the emerging technology as Tim Swanson. Through numerous books and a blog, Tim has shown a knack for going out of his way to do deep within the blockchain space.
This week on Let’s Talk bitcoin, Tim Swanson, Director of Research at Post Oak Labs, talked with Epicenter’s Brian Fabian Crain and Sebastien Couture.
His most notable work within the space has happened as Director of Market Research at R3, the first blockchain enterprise consortium for the financial services industry. During his time at R3, Tim assessed several hundred entities — companies, startups and universities — working on some type of blockchain initiative. His experience gave a full range of good, bad and ugly business operations and blockchain propositions that existed in the early stages of this industry.
Whether you agree with his stoic perspective or not, it may be a good remedy for the mania that has resulted from bitcoin’s phenomenal price increase this year. As new investors flood in the crypto community and more and more people begin talking about blockchain technology, it’s never a bad idea to be reminded of how the industry has developed.
“Historically, we’ve seen a lot of manias happen in tech: social media, solar panels, AR, VR, etc. I don’t see the benefit in becoming a fanboy in anything at this early, early stage.”
On the current state for the enterprise blockchain market
Swanson proposed that there has been a significant shift of attention in 2017 from enterprise blockchain to Initial Coin Offerings (ICOs), due in large part to the amount of money that has been raised this way. Referencing the , Swanson believes blockchain enterprise adoption is currently in the “trough of disillusionment.” This stage comes after the initial peak of expectations where interest wanes as experiments and implementations fail to deliver. This is also where many producers of the technology either give up or receive continued investment for improving the products to the satisfaction of early adopters.
“The problem as a whole for the enterprise blockchain space is that it hasn’t managed any of the expectations it initially set out to accomplish. In the beginning, there were brash claims like putting the entire United States equities market on a blockchain in less than a year. Over time, it became clear that something like that was not possible. Because of the unmanaged expectations coupled with the retail enthusiasm coming from the consumer side seeing how blockchain could help them, where in reality, enterprise is a long-term cycle and build-out, many people lost interest once they realized they could make money much faster through ICOs.”
Swanson listed a number of startups working on the enterprise blockchain side in New York, London and the west coast, including , , and , among others, as well as and , both of which Swanson still advises.
“If you look at funding for those companies — as an aggregate they’ve raised maybe $400-450 million dollars. For comparison — and it’s not an accurate comparison — ICOs in the month of June raised over $600 million dollars. It was a shift in enthusiasm from people who wanted to get very rich, very quickly. The fact of the matter, even for ICOs, is that you can’t bypass the requirement-gathering necessary to build a platform that can work with existing institutions and existing regulatory and industry requirements.”
“You can’t just build an aeroplane, convert it into a helicopter then sell it to a bunch of helicopter enthusiasts. Ultimately, somebody will have to build applications and that’s why building an ecosystem and community is so important.”
Why Aren’t There Any New Enterprise Blockchain Companies?
Swanson attributed the lack of new enterprise blockchain companies to the difficulty new startups face in working against the existing competition within the space. Established companies have a head start in acquiring the essential ingredients for success in the enterprise blockchain space: capital and some kind of partnership with regulators or players of the existing infrastructure.
Furthermore, Swanson suggested that most of the obstacles encountered by enterprise blockchain companies could be easily surmounted by larger players:
“Large enterprises like Oracle, IBM, Sap, Microsoft have the capacity and budgets to acquire any of the enterprise startups. Oracle alone could acquire all the enterprise startups themselves and not blink much of an eye.”
Transitioning from Proof of Concept to the Pilot Stage
Swanson stated that one of the most critical obstacles for enterprise blockchain startups to be mindful of are the (PFMI). These are a set of standards adopted after the 2008 financial crisis which the international community considers fundamental to strengthening and preserving financial stability.
“These principles are intended to prevent a snowball/domino affect where a local problem could potentially take down an entire system,” said Swanson. Due to the nature of these principles and how they interact within existing financial infrastructure, changing legacy infrastructure by integrating a blockchain that does not comply with these principles is far more time consuming and costly.
“Within these large corporations, you can’t just turn off legacy infrastructure, then turn on your blockchain version and continue production. Things have to be run in parallel for a while. It takes time and talent.”
The future of the blockchain in enterprise is not necessarily tied to more infrastructures, Swanson concluded. “Instead of building out more infrastructure, I am much more interested in seeing applications built on top of existing infrastructure.”
to hear Swanson on busting hype, the recent ICO spike and the rise of cryptocurrencies as a new asset class among other things.
