Etherium Classic Analysis (ETC/USD) December 5, 2017

Ethereum Classis analysis

Etherium Classic Analysis (ETC/USD) December 5, 2017

When you see this ETC rally, you wonder if there is something else that what meets the eye. Indeed given the hack and the consequent push by DAO to fork, the ETC is now building up momentum and market cap.

In fact the optimist are seeing a $50 price tag by end of Q1 2018 and this won’t surprise me at all.

Remember after the main ETH platform forked out in July 2016, ETC has gained approximately 5000% within 17 months. It goes on to show that after all, the law is code and maximalist might be right sometimes.

We must answer this question though. Is the ballooning market cap a proper foundation for ETC surge?

Technically, going by ETC rally in November alone, optimists have something to smile about.

Check this: if you paste a Fibonacci extension tool between Jan and May Hi-Los then you realize that our ideal take profit level is marked by the 61.8% extension level at $41.

 In this case, the best way to know if this might be hit is to introduce the Fibonacci retracement tool between the same points and guess what, reversals are from 61.8% level.

 This tells us one thing: That after ETC peaked in May, momentum was not strong enough to resume the rally and that is why we saw prices dropping almost 60% before the bull rally resumed. You can tell this from the way momentum was dropping. Before the second leg up, price action consolidated for 6 weeks between Mid-September and Early November along the 68.2% retracement level. Concurrently, bull momentum picked up from the oversold territory with a strong buy signal.

Advised from this, it is only prudent for traders to buy from every dip. The daily chart is generally bullish and we can see that divergence between the closing price and the middle BB.

 Even though there was a strong bear candlestick on November 29 following an over-extension on November 28, bull momentum remain strong and should ideally neutralize any attempt of ETC correction. In fact price action is banding along the upper BB meaning strong momentum.

However, in the past few days, this momentum looks like it is slowing. Price action is actually over-stretched to the upside with these lower highs relative to the upper BB.

In the 4HR chart, stochastics are bearish and USD bulls are driving prices lower. Additionally, we can see that the 20 period MA which has been a reliable support line in the past 4 weeks has now been tested and breached two time in less than 10 days. This tells you that bull momentum is building up. At the moment, we rely on price action break and close above the wedge in either direction for our short term trend to be defined.

We shall be looking to buy on dips meaning we only buy when there is a stochastic buy signal turning from the oversold territory.

Alternatively a buy stop above November 28 highs of $33 will do the trick just in case prices turn without fulfilling our first condition.

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