Trade Recommendation: Ethereum Classic/Bitcoin

After the mayhem of the past few days, certain cryptocurrencies are showing bottoming formations. Some of these are likely to embark on a new uptrend. One such virtual currency is ETC/BTC, which has completed a bullish setup. Let’s study the patterns.

Important points

  1. The ETC/BTC pair has broken out of a basing pattern and a bullish formation.
  2. We expect the cryptocurrency to start a new uptrend.
  3. Buy 00034, SL 0.0022, Target objective 0.0049 and 0.0075.

Weekly chart

We find two bottoming formations on the ETC/BTC pair. One is the range bound trading between 0.00137390 and 0.00317098 for the past few months. The second is the formation of an ascending triangle pattern, which is also a bullish setup.

However, we need to keep in mind that there were four previous attempts to breakout of the range, which failed. Therefore, we shall keep a close stop loss, should this breakout also turn down. Notwithstanding, the risk to reward ratio is attractive, therefore, we are recommending this trade.

Daily chart

Yesterday, February 12, the cryptocurrency finally managed to breakout and close (as per the UTC time frame) above the large range it has been stuck in since mid-September of last year. We believe that if price breaks out of yesterday’s high of 0.00339935, it is likely to rally towards its target objective of 0.00496806. Long-term traders can book partial profits at this level and hold the rest, as a breakout above 0.005 is likely to carry it to 0.0075 levels.

Hence, we recommend buying ETC/BTC at 0.0034, with a stop loss of 0.0022, a level not breached since January 10 of this year.

The other pattern we find on the cryptocurrency is an ascending triangle. The price pierced through the overhead resistance and closed above it yesterday, which completes the bullish setup. Our bullish view will be invalidated if price breaks down of the trendline of the ascending triangle. This pattern also has the same buy and sell levels.

Featured image courtesy of Shutterstock. 

Rakesh Upadhyay is a Technical Analyst and Portfolio Consultant for The Summit Group. He has more than a decade of experience as a private trader. His philosophy is to use technical analysis for momentum trading and fundamental analysis for long-term positions. Rakesh likes to keep himself fit by lifting weights and considers himself to be a spiritual person.