Trade Recommendation: Ethereum Classic

The Ethereum Classic/US Dollar pair (ETC/USD) started a bull run on November 27, 2017 when it took out resistance of $23. This triggered the rounding bottom pattern on the daily chart. The breakout attracted so much momentum that the pair went as high as $47.296 on January 14, 2018. In about a month and a half, ETC/USD grew by over 105%.

At this point, the target of the rounding bottom pattern was achieved. Consequently, those who bought the breakout took profits. The heavy selling drove the pair to as low as $12.966 on April 6. At this price level, ETC/USD lost over 72% of its value from the top.

With a bottom in place, the pair rallied. It went as high as $25.647 on May 6. Bears may have defended the $23 resistance as the ETC/USD pulled back. However, this can be your chance to buy the bottom.

Technical analysis show that ETC/USD is respecting support of $13. This view comes after the pair went was low as $12 on June 10 but bulls preserved the support. In addition, the support was confirmed on June 24 when the pair dropped to $13.15 and then the market bounced with good volume.

The strategy is to buy as close to $13 as possible. As long as the pair is above this level, bulls have the momentum they need to move to our target of $23.

The process may take a month.

Daily Chart of ETC/USD on Kraken

As of this writing, the ETC/USD pair is trading at $15.6 on Kraken.

Summary of Strategy

Buy: As close to $13 as possible.

Target: $23

Stop: $12

 

Disclaimer: The writer 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.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.