Ethereum (ETH) and Ethereum Classic (ETC) appear to have very different outlooks for the short-term. In this article, we compare their respective patterns, analyze technical indicators, and define long trade setups for both.
In the conclusion, we summarize our findings and rank both of the cryptocurrencies based on their future price potential.
Ethereum (ETH) vs Ethereum Classic (ETC): Price Outlook
ETH/USD reached a low of $105.00 on Feb 8. Over the next few weeks, Ethereum made significant gains reachings a high of $170.0 on Feb 24.
Since early February, Ethereum has been trading within an ascending channel as seen in the graph below:
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Both the resistance and support lines have been touched three times.
Ethereum Classic has also been trading along an ascending support line similar to Ethereum. However, there is no visible resistance line. Thus, while Ethereum displays a clear trading pattern, Ethereum Classic does not.
Ethereum’s Short-Term Ascending Channel
To better assess possible short-term price fluctuations, a shorter-term trading ascending channel for Ethereum is shown in the graph below: Ethereum is analyzed on a shorter time frame
On April 25, the price made a high of $167.36. A rapid decrease took it to a low of $148.88 the same day. While trading inside the channel, the price has increased by 18%.
At the time of writing, the price was nearing the support line.
To determine whether or not Ethereum will drop further or bounce back toward the resistance line, we have outlined the 50-,100-, 150- and 200-period moving averages (MA) in the graph below:
The price has been trading above all moving averages. Furthermore, multiple bullish crosses occurred on May 6. In addition, the price has recently fallen from the resistance line but maintained support above the moving averages.
Sponsored SponsoredThus, it appears as if the price is likely to increase and that a new uptrend may have already been initiated. indicating that an uptrend may have begun.
Long Trade Setup for Ethereum
Since the price is currently trading close to the support line of the channel, we are going to analyze a possible trade setup with an average entry of $173. At the time of writing, the price was trading near this level.
A stop-loss is placed well below the May 8 low at $167.5 This is done in order to prevent the stop-loss being triggered by a wick breakdown.
This is a stop-loss of 3.5%.
Our target would be set close to the resistance line of the channel near the May 7 highs at $189. Combined with the stop loss presented earlier, this would present a 2.5:1 risk to reward ratio. Based on our analysis of technical indicators, we believe this to be likely.
Ethereum Classic’s Ascending Triangle
On Apr 25, the price of Ethereum Classic reached a low of $5.25. A gradual upward move followed, and a high of $6.48 was reached on May 3. Soon thereafter, price began falling before bottoming out at $5.76 on May 6.
SponsoredThese lows trace an ascending support line. Together, with a resistance line traced near $6.45, an ascending triangle emerges for the period Apr 25-May 8:
At the time of writing, the price was trading slightly above the support line of the channel. Unless price breaks down, we might expect ETC to bounce back toward the resistance line.
To better evaluate this possibility, we have outlined the 50-,100-, 150- and 200-period moving averages (MA) below:
We can see that several bearish crosses have occurred between the aforementioned moving averages on May 7 and May 8. Furthermore, while the price briefly moved above the MAs, a rapid decrease brought it back down.
However, the 50-period MA has started showing signs of strength and is close to making a bullish cross. In addition, the ascending triangle is a bullish pattern and the price is very close to the support line.
Based on these indicators, we have outlined a possible long trade setup for Ethereum Classic in the next section.
Long Trade Setup
Sponsored SponsoredSince the price is currently trading close to the support line of the channel, we are going to analyze a possible trade setup with an average entry of $5.9. At the time of writing, the price was trading very close to these levels.
A stop-loss will be placed below the May 6 low and the support line at $5.7. This is a stop-loss of 2.21%.
Our target is the resistance line of the triangle at $6.45. Combined with the stop loss presented earlier, this would present a 4:1 risk to reward ratio. Based on our analysis of technical indicators, we believe this to be possible.
Conclusion
To conclude, ETH is trading inside a long-term neutral pattern, while ETC is trading inside a bullish one. The technical indicators give a bullish outlook for ETH and a bearish one for ETC. Both coins have a profitable long trade setup in place, but Ethereum Classic has a better risk to reward ratio.
Therefore, we believe that price increases are in store for both ETH and ETC. However, we believe that ETH has a high potential for gradual increase, while ETC is likely to make impulsive moves.
Since Ethereum Classic is trading inside an ascending triangle, we believe this will be a breakout. However, the resistance provided by the moving averages and the numerous bearish crosses also suggest that a rapid breakdown may still occur.
Therefore, we have a positive outlook for both coins, but we believe that ETH is the safer pick with a lower profit, while ETC has a higher potential of both profit and loss.
A summary is presented in the table below:
|
|
ETH |
ETC |
WINNER |
|
Outlook | Trading inside an ascending channel |
Ascending Triangle |
ETC |
|
Pattern & Indicators |
Moving averages have made a bullish cross and support further growth |
Bearish cross between several moving averages which are providing resistance |
ETH |
| Trade Setup | Long trade with 2.5:1 risk to reward ratio | Long trade with 4:1 risk to reward ratio | ETC |
Do you think that Ethereum and Ethereum Classic are both poised for upward growth? Which do you think is the better investment?
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
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