After the strong moves in the previous month, Ethereum is now consolidating inside a symmetrical triangle pattern as bulls and bears wait for catalysts. Price is approaching the peak of the formation so a breakout might be due soon.
The 100 SMA is above the longer-term 200 SMA to hint that the path of least resistance is to the upside. In other words, an upside break might be more likely to happen than a downside break. The chart pattern is around $80 tall so the resulting move could be of the same size.
RSI appears to be slowly making its way down, indicating that sellers have the upper hand. This could lead to a break below the $290 triangle bottom, which is also around the 200 SMA dynamic inflection point. Stochastic was on its way up to show the presence of buying pressure but seems to be turning down also.
Ethereum has been struggling to hold its ground since breaking below the $300 key psychological level. Buyers would need to be strong enough to push price past this level to draw more bullish energy and sustain any rallies.
The recent drop is being pinned on the cashing of ICOs as most tokens chalk up consecutive declines. And since ERC-20 tokens were mostly used for the creation of ICOs for funding purposes, the profit-taking activity has consequently led to selling of Ethereum.
A pickup in cryptocurrency prices could then be needed to restore demand for Ethereum, as well as improvement in risk taking. Traders are keeping tabs on Turkey and potential contagion, as this might also lift demand for alternative assets like digital currencies. This has been the case when capital controls were imposed on Greece a few years back as people looked for a better store of value or medium of exchange than a rapidly dropping currency.