Technical Analysis and Market Entry: Ethereum Classic Vulnerable to Another Steep Fall
- Ethereum Classic price remains heavily dictated by the bears, stuck within a stubborn trend south.
- ETC/USD is moving within a bearish pennant structure via the daily chart view, subject to a breakout south.
ETC/USD Recent Price Behaviour
The Ethereum Classic price continues to drive south, as the sellers maintain full control of the trend. ETC/USD has been moving to the downside since the latter stages of June, having lost some 55%. The price has been trading at heights of $9.70, before losing upside momentum, falling to depressed levels of $4.00. It hit its lowest levels that had been observed since March when the market was trending north.
At the start of 2019, the price was making very promising moves to the upside, having started the year down at $4.00. The price jumped as high as $14.00, which was the highest seen since September 2018. During the 2019 recovery, ETC/USD was being supported to the upside by an ascending trend line. It had been supporting the price since December 2018, when ETC had bottomed out after a steep bear market.
The sellers were able to force a breach on 24 September, which saw a huge wave of selling pressure come into play. ETC/USD in one day tumbled as much as 25%, which was the biggest loss in a day seen since 27 June. The breach of critical support has left the price exposed to further downside pressure. ETC has been moving within consolidation mode following the breakout, for going on three weeks now.
Pennant Structure Subject to Breakout
ETC/USD price action via the daily chart view has formed a bearish pennant pattern formation, in line with the above-detailed consolidation. The price has been very much narrowing and remains subject to a breakout and resumption in trending south. In terms of the next potential fall, it could prove to be very punishing. ETC has already reversed 100% of the 2019 bull run, as the bears eye a deeper move lower.
Given the above-detailed pennant structure, another drop does appear to be favourable. Targets to the downside of interest are; $3.60, the low area of February and then $3.20, where the price had bottomed in 2018. Entry would be around the current market price, as long as it remains within the pennant. Stops to be placed just above the structure at $5.05.
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.
Featured image courtesy of Shutterstock.