Trade Recommendation: Ethereum Classic
Our April 7, 2019 trade recommendation for Ethereum Classic (ETC/USD) hit its target. Those who stuck to the trade plan grew their investments by over 83% as the cryptocurrency rose to $9.648 on June 2, 2019.
Although Ethereum Classic slightly overshot our target, we were happy to lock in gains. At that point, the market was flashing corrective signals. First, we spotted a large bearish divergence on the daily RSI. This indicated that the bullish momentum was significantly waning in spite of rising prices. Also, the volume has become anemic. This was a signal that buyers were starting to lose interest.
With these writings on the wall, we are expecting a significant correction. This is where we try to bottom pick the market.
Technical analysis shows that ETC/USD is en route to support of $6.80. We have this view because $6.80 is the market’s closest support. We believe this level will hold for a couple of reasons.
First, the 50-day moving average (MA) and the 100-day MA are crawling close to $6.80. They will act as additional supports to keep the market from falling lower. Also, $6.80 is a drop of over 13% from the cryptocurrency’s current price. By the time Ethereum Classic hits our bottom-picking target, we expect it to trade close to oversold conditions.
The strategy is to buy on dips as close to $6.80 as possible. As long as bulls defend this level, they will likely gather the momentum to hit our target of $9.80.
The process may take a month.
Daily Chart of Ethereum Classic/US Dollar on Bitfinex
Summary of Strategy
Buy: As close to $6.80 as possible.
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.
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