Technical Analysis and Market Entry: ETC/USD Has Triggered Free-Fall Mode
- Ethereum Classic is firmly within the control of the sellers, following deadly evening star formation.
- ETC/USD is largely at risk of giving up the 2020 gains, which saw the price rallying some 295%.
ETC/USD: Recent Price Behaviour
Ethereum Classic (ETC) price action is back within the control of the market bears, as it loses upside momentum. ETC/USD was on a solid run from the very start of 2020. The price had initially started the year down at depressed levels of $4. At the time it was trading down at the lowest seen since December 2018.
Following the price bottoming out, the bulls managed to lay the foundations for a launch-pad to the north. ETC/USD went on to rally for eight consecutive weeks, the most substantial run seen of all-time for the crypto. The move was somewhat exacerbated following a breakout from a descending wedge structure, which had been containing price action. Ethereum Classic was stuck within this from June to December 2019.
The price during its upswing within the noted period gained a whopping 295%, at the time no slowdown was in sight. However, despite this promising looking run, there has been much of a change in bias. It is somewhat of a technically needed correction, as ETC/USD was largely overbought, making it susceptible to a pullback.
Weekly Chart View
Price action via the weekly chart view is now largely pointing to a pullback and possibly even a reversal of the 2020 gains. The candlestick closure for the week of 3 February, was the signal that a change in trend was coming. It formed a bearish evening star formation, after rejecting in the $13 territory, up at April 2019 highs.
As a result of the deadly evening star, there has been consistent weekly selling since. ETC/USD is more or less running towards its third week in the red, having lost some 33% since the formation. At the time of writing, Ethereum Classic can be seen testing a critical weekly support area to the downside $9 – 8.50.
Daily Chart View
ETC/USD via the daily chart view is breaking down support around the $8.60 mark. If a breakout and closure below occur, it will likely invite a strong wave of downside pressure. The potential for the bears will be favourable to push for a reversal of the 2020 gains.
Given the current pace of downside momentum, further moves to the north are still eyed. In terms of entry; around the current market price, upon a daily breakout and retest of $8.60 (50% Fibonacci). Targets to the downside eyed at; $7.00 (61.8% Fibonacci), $6.00 and then $5.50. Stops placed at $9.55.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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