ETC USDT - Patience is Key

16 באוג׳ 2022

Several weeks ago I proposed a technical analysis trade setup for Ethereum Classic.

First, I analyzed to see what the regime for this asset was: Mark Up, Mark Down, Consolidation.

We noted that the regime appeared to be Mark Down, and furthermore that ETC was trading in an identifiable pattern, a channel.

Channels are lovely when you discover them, as they give clearly defined entry and exit zones as well as easy invalidation in the event you are wrong.

On the 25th of July, as I conducted this initial analysis, two proposed trendlines were drawn. In the first example, it seemed as if ETC was at resistance and that entry at that time would have been wise. I decided to be patient however, and wait for price to prove to me that my analysis was correct.

I'm glad I was patient, as ETC has seen further upside pressure. Most of this is fundamental: as ETH moves toward The Merge, miners are panicking as their cash cow is about to exit. While there is much talk about forking ETH, with one version becoming the new PoS Merged System, and the remaining one the current PoW version. However, Ethereum Classic is already an ETH-miner friendly chain. It is the original ETH PoW chain.

Therefore, the idea is that many miners in anticipation of the merge will begin porting over to ETC instead. This idea seems to have merit.

We now have a clash of fundamental and technical analysis. The technicals show-case a wonderful short opportunity, however the fundamentals hint that much more upside could be in store for ETC.

In this situation patience is key. We need to wait for price action to show us that the selling has begun, and trigger our entry into this short position.

I'm waiting for price to break down below the red zone, at which point I will enter into my short position. Targets and stop loss are clearly marked on the chart.

Feedback and thoughts are much appreciated.