Ethereum Classic (CRYPTO: ETC) was trading almost 3% lower on Wednesday afternoon in sympathy with Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), which were consolidating down about 1.8% and 1.7%, respectively.
The cryptocurrency sector received a boost after the U.S. and its allies imposed harsh sanctions effecting Russian banks that have crippled the Russian economy and dropped the value of the Ruble to under 1-cent USD. Ironically, the historically volatile cryptocurrency sector may provide the most stable payment and even savings option available to many Russians at this time.
Ethereum Classic is unlikely to be the cryptocurrency of choice for most Russians due to its relatively low utility compared to other cryptos, such as stablecoin Tether (CRYPTO: USDT), which can be used to buy Bitcoin and Ethereum.
However, Ethereum Classic is likely to move in unison with the apex cryptocurrencies, and has settled into a bullish pattern on the daily chart.
The Ethereum Classic Chart: Ethereum Classic reversed course into an uptrend on Feb. 24, and has since printed one higher low and one higher high, which confirm the pattern. On Wednesday, Ethereum Classic may have printed the next higher low in the pattern, but if lower prices come again on Thursday, the pattern will remain intact as long as the crypto doesn’t fall below $26.91.
Ethereum may also be settling into a bull flag pattern, with the pole formed between Feb. 24 and Mar. 1 and the flag beginning to form on Wednesday. If the pattern is recognized, the measured move is about 35%, which indicates Ethereum Classic could trade up toward about $39.
The lower prices on Wednesday indicate consolidation because the crypto was trading with lower-than-average volume. By midafternoon, Ethereum Classic’s volume was measuring in at about 124,264 compared to the 10-day average of 204,431.
Ethereum Classic is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending in line with the 21-day, both of which are bullish indicators. The crypto is also trading above the 50-day simple moving average, which indicates longer-term sentiment is bullish.
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- Bulls want to see continued consolidation on low volume and for the crypto to hold above the moving averages before big bullish volume comes in and breaks Ethereum Classic up from the flag formation. Ethereum Classic has resistance above at $32.17 and $36.82.
- Bears want to see big bearish volume come in and drop Ethereum Classic down below the most recent higher low, which would negate the uptrend and make the recent highs a bull trap. Ethereum Classic has support below at $27.67 and $24.58.
- Photo: Courtesy of ETC on Flickr
