Ethereum Classic (ETC) has recently experienced an interesting price pattern that has sparked attention in the cryptocurrency community. Let’s delve into it and uncover its potential implications.
What’s the Story Behind the Pattern?
Over the past few weeks, ETC has exhibited a pattern called a “double-top reversal pattern.” A double-top pattern occurs when the price of a cryptocurrency forms two peaks or “tops” of similar height, with a small dip in between. This pattern often signals a potential reversal in the market trend.
In the case of ETC, the double-top pattern formed at around $23.42. If the price had broken below the “support level” (which was at $19.33), it would have confirmed the bearish reversal pattern. This could have led to a potential drop of up to 21%.
Why the Pattern May Not Play Out as Expected
However, the price of ETC took an unexpected turn. Instead of falling below the support level, it bounced back slightly, currently trading around $19.90. This suggests that the double-top reversal pattern may not materialize as expected.
Several indicators support this view. The Relative Strength Index (RSI), which measures momentum, is still in the bearish zone. However, the Moving Average Convergence Divergence (MACD) indicator, which shows the relationship between two moving averages, has recently crossed over, signaling a potential shift to bullish territory.
What Could Happen Next?
The future of ETC’s price is uncertain. If the broader cryptocurrency market continues to show bullish cues, ETC could move sideways or even rise above $20, invalidating the bearish pattern.
On the other hand, if the price falls below $19, it could indicate that the reversal pattern is still in play. However, it’s important to note that the pattern would only be considered a complete success if the price reaches the target of $15.24.
FAQs
What is a double-top reversal pattern?
A double-top reversal pattern occurs when the price of a cryptocurrency forms two peaks or “tops” of similar height, with a small dip in between. It often signals a potential reversal in the market trend.
What is the significance of the Relative Strength Index (RSI)?
The RSI measures momentum and can indicate whether a cryptocurrency is overbought or oversold. A value below 30 suggests it’s oversold, while a value above 70 suggests it’s overbought.
What is the Moving Average Convergence Divergence (MACD)?
The MACD shows the relationship between two moving averages. A crossover from below to above the zero line can signal a change from bearish to bullish territory.
Disclaimer: This article contains forward-looking statements. Investing in cryptocurrencies involves risks. Readers should do their own research before making any investment decisions.
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