While cryptocurrencies began the week swinging between gains and losses, the outlook might not be too optimistic for some of the biggest digital assets.
A tool used by technical analysts called the GTI VERA Convergence Divergence Indicator that detects trend reversals is flashing a sell signal for Ether, with the longest buying trend since October ending for the third-biggest digital currency. The shift could foreshadow a negative turn for Bitcoin, which is close to a trend reversal as well.
Ether slipped as much as 9.5 percent to $113.49 in New York, the fifth decline in six trading days, before moving higher. Bitcoin, the biggest digital asset, slumped as much as 4.5 percent to $3,487, the lowest level since Dec. 18, before recovering to be little changed. XRP, which has surpassed Ether as the second-largest coin, fell as much as 5.7 percent to around 32 cents.
To be sure, some good news may be in store with the Ethereum network due for a software upgrade on Jan. 16. The vast majority of miners whose computers support the network are expected to adopt the changes, which should reduce the rewards for providing the computing power, and consequently -- the supply of new coins entering the market.
— With assistance by Kenneth Sexton
By Olga Kharif