- September 8, 2022
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
Ethereum Classic (ETCUSD) has been trading within a Channel Down on the medium-term, since the July 29 High. This has come after an enormous and very quick +250% rise on fundamentals, since the July 13 Low. The overall trend since the May 2021 market high has been bearish inside a Channel Down pattern.
You can argue that the July 29 High and the Lower Highs that followed broke above the Channel Down, however it is only marginally and have been so far contained with the 1.118 Fibonacci extension, which is within tolerance levels, just like the break below the Channel on the June 18 Low that was contained within the -0.118 Fib. In fact, see how perfectly each of the recent Lower Highs remains on the 1.118 Fib.
Since the mid July rally was so aggressive, the Channel Down that followed can be technically viewed as a Bull Flag pattern, preparing a longer-term bullish move. This gets even more significant as the 1D RSI rebounded on a Symmetrical Support level which during this 2021/22 Bear Cycle, always broke lower after but this time it provided a strong rise that broke above its Lower Highs. Furthermore, the 1D MACD just made a new Bullish Cross, the first one on such high values during this Bear Cycle. In addition, the price has already broken 4 times above the 1W MA50 (red trend-line), which on March 29 rejected the rally at that time. Last but not least, we have been trading on the strongest 1D Golden Cross (when the MA50 crosses above the MA200) since December 26 2020!
As a result, we could give the bull side a slight edge but only as long as the 1D MA50 (blue trend-line) and especially the 1D MA200 (orange trend-line) hold. In that case we can expect a Flag break-out and test of the 53.000 Resistance which was the previous Lower High of March 29. Above that level, we can confidently claim that the bullish trend has been restored on the long-term.
A break (candle close) below the 1D MA200 though, could kick-start a new downward sequence. In that case, a high probability target can be the 0.236 Fibonacci level, which as shown on the chart (circles) was hit on every major bearish leg within this Bear Cycle.