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In our latest Cryptocurrency vs. Cannabis price analysis, we noted that has spiked by over 40% during the last week.
Blockchain is a digital ledger that’s used for storing data on several servers across the world in a decentralized, trustless... More Classic come falling down as Ethereum pushes forward to new heights?has also seen recent gains but appears to have broken down from a short-term trading pattern recently. Will
In this analysis, we continue our analysis of ETH and ETC in attempt to answer this and other questions. We begin by comparing price trends and fluctuations alongside technical indicators. Then we summarize our findings and rank both of the cryptocurrencies based on their future price potential.
ETH/USD reached a low of $119.22 on Feb 12. Over the next few weeks, Ethereum made significant gains, reaching a high of $170 on Feb 24.
Since then, Ethereum has been trading inside an ascending channel as seen in the graph below:
Price broke out from the resistance line of the channel on May 13.
At the time of writing, it had reached highs of $272.68. Since the breakout, the price has not been following an apparent trading pattern.
There is major resistance near $260. The area was reached by a wick high on May 16. The current daily candle is shaping up to be a bearish shooting star as evidenced by the significant upper wick.
To complete the bearish shooting star would require the closing price on May 16 to be lower than the opening price.
ETC/USD has been trading along an ascending support line since reaching lows of $4.44 on Mar 19. Unlike ETH, there is no visible resistance line; however, a resistance area is traced by early April highs.
As shown in the graph below, ETC has recently broken out of the resistance area with a wick high on May 16:
Since the beginning of the support line, the price has increased by nearly 80%.
To better determine future price movements for ETH, we analyze its price on a shorter time-frame alongside technical indicators.
In the graph below, a support line is traced from the Apr 26 low of $151.36 while a resistance line is traced from the Apr 27 high of $162.86. These lines generate a broadening wedge.
ETH traded within this wedge between Apr 27 and May 14. On May 14, the price broke out of the resistance line and has since been rising. It had broken past $270 at the time of rising.
In order to determine whether the breakout was legitimate, the price of ETH is analyzed alongside volume and the RSI below:
The breakout occurred on average volume. This may indicate that the movement does not have a lot of strength and that A reversal might be in store.
Furthermore, the RSI is deep into overbought territory. However, no divergence has developed yet. Thus, the price may be poised for a reversal in the near future but gains may precede any future losses.
Similarly to ETH, we must analyze ETC on a short time frame alongside technical indicators to best predict future price movements.
In the graph below, we see that ETC has been trading inside of a broadening wedge since May 15. Recently, the price dropped below the support and appears to have initiated a breakdown:
While the price may continue falling, it is also possible that it will rebound back into the wedge.
To determine which is more likely, we pull back to ETC’s long term support line and analyze it alongside the MACD and the RSI. This is seen in the graph below:
Bearish divergence is developing in both the RSI and MACD which suggests that ETC will decrease towards the long-term support line. Such a drop would necessarily cause the price of ETC to drop further from the short-term broadening wedge.
In the short term, a broadening wedge can be traced for both ETH and ETC. However, the wedge traced for ETC occurs on a much shorter timeframe than the one traced for ETH.
ETH is also trading within a long-term trading pattern while ETC does not appear to be doing so. A support line for ETC, however, was traced.
Furthermore, ETH recently broke out from its short- and long-term trading patterns. On the other hand, ETC appears to be breaking down from its short-term wedge and dropping toward its long-term support.
Due to the recent breakouts/breakdowns from their respective patterns, no profitable trade setups were identified for either.
A summary is presented in the table below:
|Outlook||Ascending Channel Breakout||Following an ascending support line||ETH|
|Pattern & Indicators||Broadening wedge breakout||Broadening wedge breakdown||ETH|
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