Ethereum has formed higher lows and higher highs since breaking out of a reversal pattern, indicating that bulls are gaining traction. Price hit the channel resistance and may be due for a pullback to support.

Applying the Fibonacci retracement tool shows that the 61.8% level is closest to the bottom of the channal around $440. This is also close to the 200 SMA dynamic inflection point, which adds to its strength as support.

On the subject of moving averages, the 100 SMA is above the longer-term 200 SMA on this time frame to confirm that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. The 100 SMA is in line with the 50% Fibonacci retracement level and might also hold as a floor at the mid-channel area of interest.

RSI is already indicating oversold conditions on this chart, so bulls could be eager to return. Stochastic has also reached oversold territory and could be due to turn higher, allowing Ethereum price to follow suit.

In that case, another test of the swing high could take place. Stronger bullish momentum. could take price to the channel resistance closer to $520 or higher, spurring a steeper climb. A break below the $440 area, on the other hand, could force the selloff to resume.

Cryptocurrencies have been on slightly better footing this week after completing technical breaks of key levels and taking advantage of improved sentiment in the financial markets. Trade tensions appear to be easing as market watchers turn their attention back to fundamentals.

Also, earlier this week, it has been reported that institutional interest is picking up with big hedge funds looking into investment opportunities in the space. Add to that a degree of FOMO in the markets and cryptocurrencies like Ethereum have been able to sustain gains so far.

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