- The favorable tailwind in cryptocurrencies is rolling over toward a negative headwind.
- ETC is in a technical bearish pattern.
- A break lower could wipe out 20% of its value in just a matter of days.
Ethereum Classic (ETC) is not doing so great these past few days or even two weeks for that matter. After buyers tried to attack $80, price action faded lower, and ETC fell into a bearish triangle.
The triangle got formed on August 15 with the last moment when buyers were very much in control. Price action got reversed aggressively the day after. Since then, ETC tested that descending black trend line three times – which makes it a real force to be reckoned with.
A bearish triangle is the main focus
The flat orange line at $59.70 is doing its best to uphold the price action for the base, but that level looks relatively weak as the only real historical value is originating from August 19. The completion of the triangle is being helped with the rollover from the favorable tailwind in cryptocurrencies, which has now turned into a negative headwind. Overall, the general sentiment is starting to sour in global markets in light of Jackson Hole tomorrow. A possible taper announcement from the Federal Reserve is spooking the equity markets, although they have recently made new all-time highs.
Expect a grind lower with the base at $59.70 not holding for long. Further down, there is the 55-daily Simple Moving Average (SMA). That SMA is not really ample support, so the first real support is the red line together with the monthly pivot around $48-$50.
Expect a big move lower and more pressure to the downside if the general theme in cryptocurrencies gets even more sour.
If sentiment clears up, expect a break of the black descending trend line of the triangle. That will be the queue for buyers to get back in and retry a stab at $80.