Ethereum Classic (ETC) Technicals Point To Massive Growth In Upcoming Months

Ethereum Classic (ETC) just fell to a new yearly low in the wake of another market crash. ETC/USD has broken several supports and market structures over the past few weeks. This has happened so often that it almost makes no sense to be looking at the ETC/USD chart right now. Whenever Bitcoin (BTC) takes a fall, most cryptocurrencies have to fall even if it means breaking below a strong support. A support is only strong as long as Bitcoin (BTC) allows it to be. Let’s face it, most people in this market do not believe in other coins. If Bitcoin (BTC) is going down, they are going to sell their altcoins first and Bitcoin (BTC) second.

Now, we may not be able to tell whether the price is going to break or hold a certain support but the buying and selling patterns over the past provide us with even more useful insights to base investment decisions around. If we look at the above weekly chart for ETCUSDLongs, we can see a large bull flag that would result in a strong breakout anytime now. With that breakout, we will be able to see the price of Ethereum Classic (ETC) rise due to a growing number of long positions. This bull flag started to form around April this year when the number of longs started to increase. It is pertinent to note that the chart for ETCUSDLongs looks a lot different than BTCUSDLongs. This is because Ethereum Classic (ETC) has been much undervalued even before the bear market.

On one hand, we have the bulls beginning to get more confident, whereas on the other hand we have the bears started to lose confidence as the number of shorts starts to fall after reaching an all time high. The RSI for the above weekly chart for ETCUSDShorts shows that the number of shorts has now reached a critical resistance. Breaking above this resistance would mean violating a years’ long pattern which is unlikely. The most likely scenario is that the number of shorts is going to continue to fall gradually until it escapes the rising wedge. After breaking below the falling wedge, the number of shorts is expected to fall aggressively which means the price of Ethereum Classic (ETC) would climb to a new all time high towards mid 2019.

Shorting Ethereum Classic (ETC) has mostly been unprofitable and quite risky as we have seen in the past. For instance, if we look at the above chart for ETC Shorts, we can see that the number of shorts reached its first all time high between September and October. A quick look at ETC/USD would confirm that this would have been a very risky move as this was just before the December 2017 rally. The number of shorts peaked when the price of Ethereum Classic (ETC) peaked. When Ethereum Classic (ETC) started to fall, the number of shorts also started to fall till late April when it should in fact have risen! This goes on to show how often the crowd is wrong about market movements. If you had taken this rising number of sell positions as a sign of weakness, you might have missed out on major gains.