One great trader I once worked used to tell me, no matter what kind of up move you are expecting there will always be a dip.

Current price action in ETHUSD is currently proving him right. ETH hit resistance from back in August near 225 and has made a move back toward the 200-day moving average near 208. In the most optimistic scenario, ETH would hang out around the 200-DMA while the "overbought condition" gets relieved. In this case, the overbought condition would be relieved if a long term RSI , like the 14-day RSI , came back to a more neutral territory near 50. It seems other big rallies in ETH have unfolded after the 14-day RSI moves back to near 50.

As an indicator, RSI ranges between 0 and 100. A 14-day RSI is useful if you have a longer-term trading horizon.

Bottom Line: In our view, the ETHUSD dip is related to what may be relentless tax-loss selling in the altcoin universe. We do believe ETH can do well in the fourth quarter regardless of what happens to alts. It's a bold thought. We believe ETH can follow BTC and LTC higher rather than tracking alts lower.

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