Here’s Why Ethereum Classic Is Soaring On Sunday
[Benzinga]
ZINGER KEY POINTS
- Ethereum Classic negated its downtrend during Saturday’s 24-hour trading session by printing a higher high.
- Eventually the crypto will fall lower to consolidate, which may provide a solid entry for bullish traders.
ETC/USD
was skyrocketing over 18% during Sunday’s 24-hour trading session, in continuation after soaring over 14% higher during Saturday’s session. The crypto was showing strength compared to Bitcoin
BTC/USD and Ethereum ETH/USD, which were trading mostly flat.
The surge higher negated Ethereum Classic’s downtrend, which the crypto had been stuck in since June 26 when it rejected the $18 level. Although an uptrend has yet to be confirmed on the daily chart, Ethereum Classic has confirmed an uptrend on the four-hour chart and if the crypto can print a higher low on the eight-hour chart next, a daily uptrend is likely to follow.
An uptrend occurs when a stock or crypto consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods.
Traders can use moving averages to help identify an uptrend, with rising lower time frame moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend.
Rising longer-term moving averages (such as the 200-day simple moving average) indicate a long-term uptrend.
A stock or crypto often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often take place at resistance and support levels.
In an uptrend the “trend is your friend” until it’s not, and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:
- Bullish traders who are already holding a position in a stock or crypto can feel confident the uptrend will continue unless the stock makes a lower low. Traders looking to take a position in a stock or crypto trading in an uptrend can usually find the safest entry on the higher low.
- Bearish traders can enter the trade on the higher high and exit on the pullback. These traders can also enter when the uptrend breaks and the stock or crypto makes a lower low, indicating a reversal into a downtrend may be in the cards.
The Ethereum Classic Chart: Ethereum Classic negated its downtrend during Friday’s 24-hour trading session, when the crypto printed a higher high above the most recent lower high of $16.35, which was formed on July 8. Eventually, Ethereum Classic will need to consolidate lower to create a higher low above the most recent $13.34 low that was printed on July 13.
- The moves higher during Friday and Saturday’s session were on higher-than-average and increasing volume, which indicates a high degree of interest has returned into Ethereum Classic. At press time, Ethereum Classic’s volume was measuring in at about 537,000 on Coinbase compared to the 10-day average of 128,512.
- The move higher also caused the eight-day exponential moving average (EMA) to cross above the 21-day EMA, which will give bullish traders more confidence going forward. On Saturday, Ethereum classic tested the 50-day simple moving average as support and when the crypto held above the level it demonstrated longer-term sentiment has turned bullish.
- Ethereum Classic has resistance above at $24.58 and $27.67 and support below at $20.45 and $15.27.
By Melanie Schaffer, Benzinga Editor