Ethereum Classic (ETC/USD) January 23, 2018
My stand on this currency pair is simple: bears will only be in charge if they break below the neck line at $25. Why? As we have explained before, despite the waving price action, there are two distinct zones separated by this support line.
The first is price action below it where $25 acts as resistance and that was before week ending December 3, 2017 and after that break out, support of all subsequent candlesticks were at this very level.
See the difference and the boundary? If so, then you know that we shall be trading a bullish break out trade which will be nullified if and only if there is follow through of last week’s candlestick. It would even be worse for buyers if sellers breach the middle BB.
There are two things that can happen this week based on price action. Besides the obvious lower lows, the long lower wick from last week’s candlestick can bring some equilibrium and cause prices to consolidate between $25 on the lower side and the 1st Fibonacci extension at around $40 on the upper side.
If that is the case, trend traders shall focus on the trading chart and trade longs only.
In the daily chart, price action is in a clear ranging mode market. No movement whatsoever and all we have to do is be patient.
If $40 and the double tops is to be breached, then we expect yesterday’s bear candlestick to be countered by bulls as prices get back above the middle BB.
There are two conflicting patterns in the weekly chart. One is the bearish engulfing pattern after last week close which concluded a double bar bear reversal pattern and the second is the bullish break out with main support at $25 which has been on for sometimes now.
Judging from price action, bears should be in charge if sellers break below 23.6% Fibonacci retracement. On the flip side, if there is a break above $38, then buyers would be buoyed and the bull break out pattern would be valid. So, it’s a waiting game demanding patience as price action trend within this $10 potentially defining range.
