Ethereum Classic (CRYPTO: ETC) was soaring up almost 15% higher at one point on Monday in bullish continuation of a break up from a falling channel pattern in which crypto has been trading since March 27.
The pattern is bearish for the short term but can be bullish down the road.
- For bearish traders, the "trend is your friend" (until it's not) and the stock is likely to continue downward. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.
- Bullish traders will want to watch for a break up from the upper descending trendline, on high volume, for an entry. When a stock breaks up from a descending channel, it's a powerful reversal signal and indicates a rally is likely in the cards.
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The Ethereum Classic Chart: On Sunday, Ethereum Classic broke up from its falling channel pattern but made few gains due to lower-than-average volume. On Monday, the pattern became recognized and traders and investors piled into the crypto, which brought in momentum.
- As of press time, Ethereum Classic’s volume was measuring in at about 202,000 on Coinbase compared to the 10-day average of 126,086. Higher-than-average volume indicates there’s a renewed interest in the crypto after a long-term lull.
Ethereum Classic also confirmed an uptrend Monday by rising above the most recent high of $22.83 that was printed May 16.
The most recent higher low was printed on May 19 at $19.50, and when Ethereum retraces lower to possibly print its next higher low above that level, it may provide bullish traders who aren’t already in with a position a solid entry point.
If Ethereum Classic closes the 24-hour trading session with a long upper wick, the crypto will print a shooting star candlestick, which could indicate lower prices will come Tuesday. If the crypto closes the trading day near its high-of-day price, it will print a bullish Marubozu candlestick, which could indicate higher prices are in the cards.
- Ethereum Classic has resistance above at $24.58 and $27.67 and support below at $20.45 and $15.27.
