Technical indicators of Ethereum Classic (ETC) show that the digital asset could experience massive growth in 2019. All the same, it is understood that ETC was equally a victim of the bearish wave that swept the crypto market in 2018. This made the cryptocurrency to fall to its yearly low, breaking several support points and market structures over the past few weeks. At some point, the situation became quite worse that it made no sense observing the ETC/USD charts.
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A change of trend
However, we can understand that the prices of altcoins depend on the price of Bitcoin (BTC). When BTC plummets, most altcoins fall in the same manner, even if it means breaking their strong support. A fall for Bitcoin implies that most people willsell off their altcoins first before Bitcoin.
Owing to the volatility of the crypto market, it is virtually impossible to tell whether the price of ETC is going to break or hold at a given support. However, accordingto buying and selling trends witnessed in the past, we can glean usefulinsights to help make sound investment decisions. For example, according to thetrading chart for ETCUSDLongs,it is evident that a bull flag is imminent, which could lead to a powerfulbreakout anytime. When that happens, the price of Ethereum Classic (ETC) couldshoot due to a growing number of long positions. For ETC, the bull flag startedshowing up in April this year, when the number of longs started increasing.
It is also evident that the bulls are getting more confident, as the bears begin to lose confidence. From the trading chart shown, the number of shorts is falling after they reach an all-time high.
Going by the RSI of the weekly trading chart for ETCUSDShorts shown, it is evident that the number of shorts has reached a critical point of resistance, which is unlikely to break above because that would make it violate a year’s long pattern. Therefore, what is likely to happen is that the number of shorts will continue to fall gradually until it can escape the rising wedge. When it breaks below the rising wedge, the number of shorts is likely to fall aggressively, and this could lead to the price of Ethereum Classic attaining its all-time high somewhere around mid-2019.
Trading patterns in the past show that shorting ETC is often risky and unprofitable. For example, the above chart shows that the number of ETC shorts attained its first all-time high somewhere between September and October. However, looking at ETC/USD, this could be a very disastrous move because it was just before the December 2017 rally. That said, the price of ETC determined the number of shorts, such thatthe number of shorts was high when ETC price was equally high.
When the price of ETC fell, the number of shorts also fell until late April when, in fact, it should have peaked. This is an indication that the crowd is often wrong in judging market movements. For example, in this particular scenario, using the increasing number of sell positions as a sign of weakness could lead to missing out on major gains.
Images courtesy of TradingView
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