Saturday morning saw three of the most favored cryptocurrencies today- Ethereum Classic, Bitcoin, and Dogecoin consolidating their position. All the three crypto-assets have had a relative strength index stretching above 70% which definitely put them in an overbought condition for potential traders and investors.
To put it simply, every cryptocurrency, just like a stock, moves into a consolidation period after either a high incline or a sharp decline. ETH Classic increased by 137% between the low of $32.17 on the 22nd of June, and the high of $77.37 on the 15th of August. Now, while bulls would definitely love to see the original crypto version, it will need to stop for some juice.
The Ethereum Classic Chart
On the 7th of August, Ethereum Classic ruptured into a descending trendline which had been keeping the crypto down since the 3rd of June. After it moved through the trendline, the cryptocurrency went up by around 46% over the last nine days. When the currency reached a high of $77, the RSI moved in at 79% which was definitely a sell signal. The crypto then went back to a level of 22%, which cooled the relative strength index to a much more preferable position of 57% before it looked for a more bullish approach.
Ethereum Classic then moved on to reject its new trendline on the 15th, 16th, and 20th of August, and on Saturday morning the crypto asset tried to move over but failed. The trading volume of the cryptocurrency at 10.00 am was about 143 million compared to the 10-day volume average of 547 million. When a stock or crypto trades down on low volume, it usually lends itself in a bullish consolidation rather than a bear break.
Ethereum Classic is currently trading over the EMA of eight days and twenty-one days with the eight-day EMA moving over the twenty-one day. Interestingly, both of them are solid bullish indicators, as Saturday morning saw the cryptocurrency testing the eight-day as support while holding on to it.