Ethereum is shaky as regulators crack down on ICOs
|- ETH/USD has recovered from recent lows, but the upside momentum is weak.
- A regulatory crackdown on scams and illegal ICOs may increase pressure on ETH.
Ethereum is changing hands at $136.55, gaining 3.5% since this time of Wednesday. The third largest coin with a market value of $14B reached the bottom at $124.25 earlier this week before the market stabilized. Despite a recovery, the upside momentum is int impressive, especially when compared to the scale of the decline.
Ethereum's technical picture
On the intraday level, ETH/USD is supported by 38.2% Fibonacci retracement level (daily) at $134.00. Once it is cleared, psychological $130.00 area, strengthened by Pivot Point Monthly Support 3 will come into focus. A sustainable movement lower will increase the downside pressure with the next aim at $124.48 (Wednesday's low).
The Relative Strength Index (4-hour) stays flat, close to the overbought territory; momentum is nowhere to be seen during quiet Asian hours, which means that the recovery may be limited. The bulls need to take the price at least above $140.00 to mitigate immediate bearish pressure and create a set up for an extended recovery.
Fundamentally, the landscape looks rocky for Ethereum as the U.S. Securities and Exchange Commission tightens the grip on shady ICOs and illegal security offerings camouflaged as token sales. Recently, the regulator charged two startups that sell $27 million worth of tokens based on ethereum blockchain. The initiators of the ICOs will have to return the money to the investors, which may lead to increased ETH selling.
In a separate case, Colorado securities division cracked down on four scam ICO projects that gave misleading promises and lied to their investors.
Read more: Miners and ICOs are killing Ethereum
ETH/USD, 4-hour chart
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