Ethereum Classic (CRYPTO: ETC) broke up from a bullish triangle pattern on Aug. 7 that Benzinga called out, then shot up 45% over the following nine days before reaching an Aug. 15 high of $77.37. The crypto has since been consolidating the move.
Ethereum Classic may also be following Bitcoin which was consolidating its own bullish break under the important $50,000 psychological level.
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The Ethereum Classic Chart: In its consolidation, Ethereum Classic and settled into a descending triangle pattern making lower highs but holding above a key resistance level at $60. The crypto is set to reach the apex of the triangle on Sept. 3 and both bullish and bearish traders can expect it to break up or down from the pattern before then.
When Ethereum Classic breaks from the pattern traders will want to watch for either big bullish or big bearish volume to come in to judge whether the pattern was recognized. Volume indicates interest in a stock or crypto, either from the bulls or the bears, and can help technical traders predict future direction.
On Wednesday, Ethereum class was attempting to print a bullish hammer candlestick after printing a black Marubozu candlestick on Tuesday. The hammer candlestick indicates a bullish trend reversal may be in the works but traders will want to see Thursday’s candle for confirmation of the pattern.
The crypto is trading below the eight-day exponential moving average (EMA) and inline the 21-day EMA with the eight-day EMA trending above the 21-day, which shows bullish indecision. Bulls will want to see Ethereum Classic regain support of the eight-day EMA in the near future to avoid the eight-day EMA crossing below the 21-day.
Ethereum Classic is trading almost 50% above the 200-day simple moving average which indicates overall sentiment in the crypto is bullish. The 200-day SMA is a key indicator used by traders and analysts to determine overall market trends and Ethereum Classic has not traded below the level since January 2021.
- Bulls want to see big bullish volume come in and drive Ethereum Classic up through a resistance level at $65.10 and over the descending trendline of the triangle. If Ethereum breaks up from the triangle with high volume it has room toward the $72 mark.
- Bears want to see big bearish volume push the crypto back down toward support at the $60 level. Ethereum Classic has tested the level as support on five separate occasions and held above it, but the more times the crypto tests the level the weaker the level will become. Below $60 Ethereum Classic has support at $50.
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