Ethereum Classic suffered a steep 23 percent flash crash on Saturday in sympathy with Bitcoin and Ethereum, which fell about 15 percent and 21 percent, respectively, during the same time period.
While Ethereum has erased all of the losses from that day, Ethereum Classic and Bitcoin have failed to meaningfully rebound and both have settled into bearish patterns on the daily chart. There is a chance for Ethereum Classic bulls to negate the pattern if they can take enough control to confirm a new trend is about to begin.
Ethereum Classic Chart
When Ethereum Classic plummeted on Saturday it reached the $30 level, which the crypto has not traded at since April. Bulls came in and bought the dip and the crypto rebounded 30 percent from the level to close the 24-hour trading session at $39.44.
Since then, the crypto has traded within a tight $6 range but has increased slightly, overall. The steep fall paired with the mild upwards consolidation has settled Ethereum Classic into a possible bear flag pattern on the daily chart, with the pole created between Dec. 1 and Dec. 4 and the flag beginning to form on Sunday. If the crypto breaks bearishly down from the flag formation, traders will want to watch for increasing volume to gauge whether the pattern was recognized.
A positive sign on the Ethereum Classic Chart is the crypto made the first steps of confirming an uptrend may be in the works. Ethereum Classic has made both a higher high above Sunday’s high-of-day at $40.83 and a higher low above Saturday’s low-of-day at $30.30. If the uptrend is to continue, Ethereum Classic will need to print another higher low above the Dec. 6 low-of-day.
Ethereum Classic is trading below the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The crypto is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.
Bulls want to see big bullish volume come in and push Ethereum Classic up over the eight-day EMA, which would negate the bear flag pattern. There is resistance above at $44.66 and $50.55.
Bears want to see big bearish volume come in and break the crypto down from the bull flag pattern and for momentum to drop Ethereum Classic down under support at $32.17. Below the level, there is further support just above the $27 mark.
By Melanie Schaffer
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