Classic Ethereum (CRYPTO:ETC) was trading flat on Tuesday, in line with Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO:ETH), which were muted as the cryptocurrency market appeared to be awaiting the release of the Federal Reserve’s monthly minutes on Wednesday at 2:00 p.m.
The central bank is generally expected to raise the interest rate by 25 basis points, in an effort to combat soaring inflation, but if the Fed decides to raise rates higher or let zero interest rate, the crypto industry and markets in general could react wildly. .
The Russian-Ukrainian crisis has also weighed heavily on investors, with some at least preferring to hold cash until geopolitical risks abate and others focusing on gold, seen as the most traditional safe-haven asset.
The crypto sector has become frustrating for bullish investors as it now appears to have entered a long-term bearish cycle, with little indication of direction and many of the most popular coins continuing to trade sideways.
If a catalyst hits, volatility could enter the sector and Ethereum Classic should follow the cryptos to the top. While negative news could cause Ethereum Classic to break from the horizontal pattern the crypto has been trading in since January 5, Ethereum Classic’s chart is currently bullish.
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The Ethereum Classic chart: Ethereum Classic has been trading sideways between around $21.10 and $36.80 since then, but on Wednesday the crypto tested the $25.25 level as support and rebounded. The price action, when combined with similar price activity on March 7, Sunday and Monday, placed Ethereum Classic into a bullish quadruple bottom on the daily chart.
If the pattern is recognized, bullish traders will want to see Ethereum Classic rise on Wednesday and regain support at the eight-day exponential moving average (EMA), which is currently acting as resistance.
If Ethereum Classic reacts lower to any upcoming catalyst, traders can watch for the crypto to break below this level on above-average volume, which could indicate that a strong downward move is looming ahead. ‘horizon.
Ethereum Classic developed a medium bullish divergence on its chart as the Relative Strength Index made a series of lower highs, while the crypto’s lows remained flat. A medium bullish divergence indicates that a rebound may be in the cards.
Ethereum Classic is trading below the 8-day and 21-day EMA, with the 8-day EMA trending lower than the 21-day EMA, both of which are bearish indicators. However, the EMAs are trading in line with the 50-day simple moving average, and if Ethereum Classic can find the three moving averages as support, a strong change in sentiment could quickly take place.
Ethereum Classic has resistance above $27.65 and $32.17 and support below at $24.58 and $20.45.
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Photo: Courtesy of ETC on Flickr