ethereum classic ETC/USD There was mostly sideways consolidation during Wednesday’s 24-hour trading session, trading generally within Tuesday’s range.
Horizontal consolidation has been happening since Saturday, after the crypto gained a whopping 31.21% over the period between January 4th and January 6th.
The bullish surge paired with the sideways consolidation made Ethereum Classic possible bull flag pattern on the daily chart,
The bull flag pattern is built with a sharp rise that forms the pole, followed by a consolidation pattern that brings the stock down the middle of a channel with parallel lines or into a tightening triangle pattern.
For bearish traders, “the trend is your friend” (until it isn’t) and the stock may continue to trend lower within the following channel for a short period of time. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.
Bullish traders will look for an upside break from the upper descending trend line of the flag formation, on higher volume, for an entry. When a stock breaks out of the bull flag pattern, the move high measured is equal to the length of the pole and should be added to the lowest price within the flag.
A bull flag is rejected when a stock closes a trading day below the lower trendline of the flag pattern, or if it declines more than 50% below the length of the flag pole.
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Ethereum Classic Chart: If Ethereum Classic eventually breaks above the upper descending trend line of the flag formation, the measured move indicates that the crypto could head towards the $25 mark. Bullish traders would like to see Ethereum Classic break out of the pattern on above-average volume to signal that the pattern was recognised.
- Ethereum Classic is trading in a fairly consistent uptrend, with the most recent high made on Monday at $21.81 and the most recent low printed on Wednesday at the $19.44 mark. If Ethereum classic breaks above the bull flag, traders would want the crypto to break sharply above $22 to sustain the uptrend.
- The Relative Strength Index (RSI) for Ethereum Classic has decreased from around 67% to 62% due to the horizontal consolidation. It might be beneficial to trade the crypto in the flag for a few more days to see the RSI drop further.
- Bearish traders will be looking to see Ethereum Classic break below Wednesday’s low of the day, which would see the crypto negate the downtrend by breaking below the eight-day exponential moving average.
- Ethereum classic has an overhead resistance at $20.46 and $24.58, and a downside support at $17.91 and $15.27.
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Photo: Courtesy Etcetera on flickr.