Why An Explosion In Ethereum Classic's Price Is On The Horizon

Zinger Key Points
  • Since April 12, Ethereum Classic has been trading in a triangle pattern, creating a series of lower highs and higher lows.
  • A measured bearish move on a break from the triangle flag indicates the crypto could fall toward the $32 level.
Why An Explosion In Ethereum Classic's Price Is On The Horizon

Ethereum Classic ETC/USD spiked almost 5% higher between 8:00 p.m. on Friday and 4:00 a.m. on Saturday before it ran into a group of sellers, who dropped the crypto back down toward its 24-hour opening price.

The crypto has been trading mostly sideways in a tightening range in consolidation, after plunging over 15% on April 10 and 11, which has created a bear flag pattern on the daily chart.

The bear flag pattern is created with a steep drop lower forming the pole, which is then followed by a consolidation pattern that brings the stock higher between a channel with parallel lines or into a tightening triangle pattern.

  • For bullish traders, the "trend is your friend" (until it's not) and the stock may continue to rise upwards within the following channel for a short period of time. Aggressive traders may decide to purchase the stock at the lower trendline and exit the trade at the higher trendline.
  • Bearish traders will want to watch for a break down from the lower descending trendline of the flag formation, on high volume, for an entry. When a stock breaks down from a bear flag pattern, the measured move lower is equal to the length of the pole and should be added to the highest price within the flag.

A bear flag is negated when a stock closes a trading day above the upper trendline of the flag pattern, or if the flag rises more than 50% up the length of the pole.

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The Ethereum Classic Chart: Since April 12, Ethereum Classic has been trading in a triangle pattern, creating a series of lower highs and higher lows. The crypto is set to reach the apex of the pattern on April 19, and traders and investors can watch for big bullish or big bearish volume to enter and break Ethereum Classic up or down from the triangle before that date, to gauge whether the pattern was recognized.

If Ethereum Classic closes the trading day on Saturday near its low-of-day price, it will print a shooting star candlestick on the daily chart, which could indicate lower prices will come on Sunday. If lower prices come with increasing volume, it could indicate the bear pattern is in play.

  • The measured move on a break from the triangle flag is equal to the length of the pole, which indicates the crypto could fall toward the $32 level.
  • If Ethereum Classic closes the 24-hour session near its high-of-day, it will print a bullish engulfing candlestick, which could indicate the bear flag isn’t recognized by the algorithms and that higher prices will come on Sunday.
  • If higher prices do come, Ethereum Classic will regain the eight-day exponential moving average as support, which could give the crypto the power needed to also regain the 200-day simple moving average, which would give bulls more confidence going forward.
  • The break up or down from the triangle pattern is likely to come soon because Ethereum Classic's trading volume has been steadily decreasing, which is often followed by a big influx of volume. At press time, Ethereum Classic's volume was measuring in at just about 88,000 compared to the 10-day average of 237,940.
  • Ethereum Classic has resistance above at $38.95 and $41.41 and support below at $35.38 and $32.17.

See Also: Ethereum Founder Vitalik Buterin Has This To Say About Elon Musk's Hostile Twitter Bid

Photo: Courtesy of ETC on Flickr

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