Etherium Classic Analysis (ETC/USD) December 7, 2017

ETC/USD analysis

Etherium Classic Analysis (ETC/USD) December 7, 2017

before a store of value policy is implemented this month, the supply of ETC was infinite and pegged at 13M ETC tokens per year. Now, that’s about to change and going forward, ETC is set to act as a store of value. Because of this, ETC token demand rose and that is why prices have been exploding in the past few weeks.

You may be asking why this limitation. Well, there must be a check and balance just like everything in life.  If you splash tokens and make them infinite there will always be issues of prices deflating as it tries to overcome over supply. At the same time, too little and the system will be crippled by high demand and fail.

However, if you create a system that the number of tokens is optimized and realistically capped then value will appreciate and the system thrive.

That is set to happen and ETC will be hot real estate in the next few weeks. As planned there will be a hard cap of around 230M ETC tokens and mining reward dropping from 5 to 4ETC from December 14.

Technical indicators seem to be following suit.

The weekly chart in particular is stepping on gas with a stochastic buy signal in place and a price action is banding along the upper BB.

 Furthermore, the fact that prices are trending above May’s highs mean that prices around $25 are our immediate support line should ETC decide to spiral down.

 Either way, and as stipulated by Fibonacci retracement and Extension rules, our ultimate take profit is set at $42 and this will likely be hit if prices are maintained above $25 by the end of the week.

In the daily chart, ETC was obviously stretched to the upside when November 28 candlestick closed above the upper BB and that was confirmed by a bearish candlestick the next day bringing back equilibrium.

However, because of the strong buy pressure prices moved up temporarily before dipping as bear momentum took over. At current prices we shall rely on the 20 period MA and the $25 level as potential support line where ETC prices might be propped.

Interestingly, prices are dipping in our entry chart with candlesticks already banding along the lower BB.

This means bear momentum is strong just like in the daily chart where there is a sell signal.

 We are generally bullish and following the weekly chart trend. Now, because of this, we find that a reliable support is at $22, $3 below $25 which is a strong support level in the daily and weekly chart.

 Unless there is a bull candlestick testing the 20 period MA, we wait until a buy stochastic signal is printed at around $22 and $25 before initiating longs.

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