The ether-US dollar (ETH/USD) exchange rate fell to $278 today, a seeming response to news South Korea is joining the global backlash against the initial coin offering (ICO) funding model.
News hit the wires during the Asian trading session, with word that South Korea's Financial Services Commission would ban "all forms" of ICOs echoing out across the global market nearly four weeks after China declared ICOs similarly illegal.
At press time, however, the market response to Korea's news has been more tepid.
Despite the fact that South Korea has emerged as a major driver of trading volume, with news its exchanges will list new cryptocurrencies effectively doubling price, treaction was minimal – ether has held tightly to rangebound trading, hitting a high of $303.75 and a low of $280.59 today.
Following China's ban, ether later extended losses to $200 levels.
Still, over the last two weeks, prices regained poise on speculation that Chinese traders are shifting bases to Japan, South Korea and Hong Kong.
Going forward, any announcement from other regional regulators could likely dampen recovery efforts. This means that while ether's rebound from $278 to $297 is encouraging, price action analysis indicates it's not out of the woods yet.
The chart above shows:
- A downside break of the triangle formation. The breakdown was on the back of stronger volumes and indicates the sell-off from the record highs above $390 may have resumed.
- The recovery from the low of $278 lacks substance, i.e. volumes dropped.
- $307 is strong resistance (confluence of 4-hour 200-MA + former head and shoulders neckline).
The recovery from $278 to near $300 levels could be short-lived. A rejection at $300 followed by a break below $278 would open doors for a sell-off to $240 levels.
On the higher side, only an end of the day close above $315 would signal bearish-to-bullish trend change.
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