Saturday July 30 6:15 AM
Will ETC (Ethereum Classic) become an ongoing cryptocurrency with the potential to replace the hardforked ETH? Blockchain experts are chiming in with mixed views in a heated debate.
Now, the cryptopatterns I follow look like they are about to weigh in.
The 5 minute chart above shows a bearish head and shoulders pattern that if fulfilled will take ETC’s price down to .0022 or lower. That’s not a huge move and shouldn’t signal the end for ETC, right?
Don’t be too sure about that.
THE BEAR CASE – ETC IS A SCAM
If we get down near .0020, it becomes a high probability we will test the lows of the current move in the .00185 range. The patterns say that would be very bearish and we would almost surely break that support and go much lower.
Think of it this way, retracing the entire move would let all the shorts trapped at lower prices get out. That’s rarely how bullish moves work, and would increase the probability that much higher prices are not in the cards for ETC.
Then you’ve got the self-fulfilling prophecy likely to come into play. When traders and investors see prices plummeting, traders will likely abandon their positions (many of whom got their ETC as “free money”) and short traders will pile on to make some quick money.
It could get very ugly very quickly.
THE BULL CASE – ETC IS FOR REAL AND ETH WILL GO TO ZERO
The bullish case for ETC is very straightforward.
*ETC must make that head and shoulders fail by rising above .0265 before falling near .0020.
*If we’re in a bullish cycle for ETC then head and shoulder patterns normally typically fail and inverse head and shoulder patterns usually succeed.
* The chart for ETH above shows a massive head and shoulders pattern with a target of ZERO that I’ve covered in prior blog posts.
* ETH has been in a bearish cycle since falling from the $20 range. Recent high volume selling in ETH indicated an increasing probability that ETH’s “line in the sand” in the $10-11 will get tested.
Are the patterns telling us some catalyst is about to send ETC skyrocketing as a true player in the world of cryptocurrency while ETH starts a devastating plunge to zero?
It’s possible. But, for the millionth time patterns only show probabilities, NEVER CERTAINTIES. Anything could happen, and I mean ANYTHING – so it’s best to have a clear plan to protect yourself.
MY TRADING STRATEGY
I am currently 65% long ETC and hold no ETH, but I am not married to the bullish ETC case by any means. Let’s not forget ETC was issued at $6 and is now trading around $1.65. If were in a bullish leg up, I want to see price flying as investors keep wishing they had caught this amazing ETC bus to riches.
Price has moved up quickly for ETC, but now it’s pausing. It better not take too long, and it better not fall below .0020 BTC (quoting BTC here because the trading volume is so much higher) or the patterns are telling you that ETC is very likely the scam the ETH holders say it is.
As I posted yesterday, my hard stop on ETC is at .002335 – That’s well below the current head and shoulders line in the sand and puts me at about breakeven for the current trade. If we get there I’ll watch from the sidelines and look for a higher probability opportunity. I’ll be watching ETH closely at all times for clues but have no plans to buy at this time unless ETC breaks below .0020.
65% Long ETC
80% Long STEEM (small position)
VERY SMALL Long BTC (sales from trades above)
NOTE: NOTHING IN MY POSTS IS INTENDED TO BE TRADING ADVICE. Please do not base your trades on any information presented in the materials on this blog as it is for information and entertainment purposes only. You are 100% responsible for your own trading decisions.