Ethereum Classic (CRYPTO: ETC) pulled back about 4.5% off its $50.09 high-of-day on Tuesday following a sharp decline in the cryptocurrency and general markets brought on by comments Federal Reserve Chairman Jerome Powell made in front of the U.S. Senate banking committee.
By late afternoon, the crypto markets were bouncing back with Bitcoin (CRYPTO: BTC) trading relatively flat and Ethereum (CRYPTO: ETH) rallying over 4%. Ethereum Classic followed suit and by 1:25 p.m. EST had bounced back over 2% off the $47.85 low printed at 12 p.m.
Ethereum Classic still has a lot of work to do in order to give bullish traders confidence going forward, although the price action on Tuesday has negated at least one bearish pattern.
See Also: How to Buy Ethereum Classic
The Ethereum Classic Chart: Ethereum Classic sold off more than 16% between Nov. 25 and Nov. 28 and reached a bottom at the $44.66 level. The crypto then rallied about 9% higher between Sunday and Monday. The decline paired with the rise settled Ethereum Classic into a bear flag pattern on the daily chart, but the pattern was negated on Tuesday when the crypto recaptured support at the eight-day exponential moving average (EMA).
Since Nov. 9, Ethereum Classic has been trading in a fairly consistent downtrend making a series of lower highs and lower lows on the 24-hour chart. In order to negate the downtrend, the crypto will need to soar up over the most recent Nov. 25 high-of-day at $53.48.
If Ethereum Classic closes the 24-hour session near its high-of-day it will print a bullish hammer candlestick, which indicates higher prices may come on Wednesday. If the crypto closes the trading day flat, it will print a long-legged doji candlestick, which could indicate the lower high has been set and Ethereum Classic is likely to trade lower on Wednesday.
Ethereum Classic is trading slightly above the eight-day EMA but below the 21-day EMA, with the eight-day trending below the 21-day, which leans bearish. Ethereum Classic is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.
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Image: Ethereum Classic Wallpaper – ETC Inside, Public Domain, via Flickr
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