Ethereum Classic has toppled the upper trendline of its symmetrical, thereby setting a possible 85% surge in motion. A daily close above the 200-SMA (green) would help confirm an extended rally all the way towards the 50% Fibonacci level at $103.6.
From there, an overbought RSI could trigger a minor correction before ETC commences forward towards its May local high. At the time of writing, ETC traded at xx
Ethereum Classic Daily Chart
Source: ETC/USD, TradingView
Ethereum Classic’s symmetrical triangle has formed for nearly 5 months now following its explosive start to 2021 and a 1,550% percentage increase between late-March to early May. Based on the highest and lowest peak within the pattern, ETC eyed a 85% surge from the breakout point. Now that ETC has registered two green candles above the upper trendline, the next step was to overturn the 200-SMA (green) to bullish in order to kickstart the ascent.
Should ETC close above this long term moving average line convincingly, the 50% Fibonacci level at $103.6 would be its next destination after successfully negotiating past some sell pressure at $78.08.
To enforce a breakdown, bears would need to target a close below 27 October’s low of $43.1. In this outcome, ETC would be exposed to a massive sell-off towards late-April levels of $25. However, this was rather unlikely should the broader market continue to remain risk-on.
ReasoningÂ
ETC’s upside potential was backed by a bullish RSI which traded above 65. Over the near-term, ETC could even extend gains above the 23.6% Fibonacci level before an overbought RSI triggers a minor correction. The Directional Movement Index flashed a buy signal following a bullish crossover between the +DI and -DI lines.
Meanwhile, the Squeeze Momentum Indicator was yet to show a clear direction and maintained a neutral-bias. However, expect this to change once a ‘squeeze release’ it witnessed and volatility picks up in the market.
ConclusionÂ
ETC targeted an 85% upswing following a symmetrical triangle breakout. The RSI and DMI lent credence to a bullish prediction. Once ETC closes above its 200-SMA (green), ETC could make headway towards it target at the 50% Fibonacci level after battling past sell pressure at $78.
