Investors talk of 2017 as the year of block chain and cryptocurrency domination. I like being specific. Undoubtedly, November was the month of cryptocurrency excellence. Not only did we have record highs in Bitcoin but Ethereum Classic is charting its way up just like Ethereum.
This month alone, ETC value has increased 3 folds and there is even more room for expansion after the main resistance line and the double tops at $23.80 were blasted this week. This strong close above $23.80 further emphasized the importance of Fibonacci tool projections.
As we can see, there is a strong stochastics buy signal in place following that reversal from the 61.8% Fibonacci retracement levels. Reversals at these levels mean that prices often test the 61.8% Fibonacci extension levels which in this case is at $36.66 and just $4 from recent highs printed on November 28.
Fact is, we are in a strong bull trend and should prices correct then the tops clearly marked at around $24 shall be our first support line. In the weekly chart, you notice that USD bulls are beginning to jump in as they react to this ETC expansion and consequent close above the upper BB.
As observed, buy momentum is high following the recent bull break out. Anyway, even if prices close above the upper BB, consequent lower lows is going to be hard to figure out where it starts. Generally, picking tops in a strong uptrend is often a tall order and chances of getting burnt is high. Therefore, we only sell if today’s candlestick end up bearish now that there is a stochastic sell signal in place.
In our entry chart, sell momentum is high. As it is visible in the chart, there is a bearish engulfing candlestick following ETC close above the upper BB on November 28.
Furthermore, there was a slight bearish price action divergence relative to stochastics between November 25 and 28. Notice that ETC prices continued to climb while stochastics remained unchanged. So for now, ETC is bullish but should there be a correction then today’s candlestick must close as a bear.
Immediate support line is the 20 period MA and the minor support trend lines where price action must close below to confirm any price reversal.
Otherwise, bulls must look to buy on any dips provided a stochastic buy signal prints at around our support zones or at the oversold territory.
Alternatively, bulls can set a buy stop above today’s highs at $33.