"Classic" Oversold Ethereum Classic (ETCUSDT)
Hello again trading friends. I apologize I have been extremely busy in clinic and have not had the chance to dig into some fun technical analysis recently. I also usually don't like to comment too often, as it can drive myself and others mad with speculation. However, I have been eyeing ETCUSDT for a bit and my alarms went off as it plunged into the "oversold" zone. Let's diagnose this bad boy.
On the 4 hour chart, ETC is showing positive divergence(most clearly shown on RSI, but you can also make it out on the stoch). Positive divergence is where the RSI is trending up while the price action is trending down. It is a classic sign that a reversal may be imminent because sellers are losing momentum. It's also important to match this up with historical supports/resistances as well:
-Support at ~21s
-Historical support dating back to even November 2017 at 19s... even lower at 14s
-Resistance at 28s(not only due to historical data, but also check the thick blue line which is the 200EMA)
For even further evidence that a reversal may be imminent, check the Daily chart:
See the RSI dipping its toe into "oversold"? See what happened last time it dared to take such a bold move? Price action reversed from around 14 all the way up to the mid 40s!!! Around a 300% increase! Look at the context of the RSI being oversold too: it was during a positive trend(pink EMA above blue EMA). When a coin is oversold during a positive trend, a rebound will usually happen.
As a general rule though, don't rely on your RSI in the following scenarios: If it is above 80(overbought) during an uptrend. If the RSI is below 20(oversold) during a downtrend. This makes logical sense when you think about it. OF COURSE when there's an uptrend, the price action will . And I think it goes without saying, but don't ever rely on simply one indicator alone.
Let's see whether this reversal can take place, or if ETC will dip even farther to the 19s or 14s
Stay healthy folks <3
-Doc
On the 4 hour chart, ETC is showing positive divergence(most clearly shown on RSI, but you can also make it out on the stoch). Positive divergence is where the RSI is trending up while the price action is trending down. It is a classic sign that a reversal may be imminent because sellers are losing momentum. It's also important to match this up with historical supports/resistances as well:
-Support at ~21s
-Historical support dating back to even November 2017 at 19s... even lower at 14s
-Resistance at 28s(not only due to historical data, but also check the thick blue line which is the 200EMA)
For even further evidence that a reversal may be imminent, check the Daily chart:
See the RSI dipping its toe into "oversold"? See what happened last time it dared to take such a bold move? Price action reversed from around 14 all the way up to the mid 40s!!! Around a 300% increase! Look at the context of the RSI being oversold too: it was during a positive trend(pink EMA above blue EMA). When a coin is oversold during a positive trend, a rebound will usually happen.
As a general rule though, don't rely on your RSI in the following scenarios: If it is above 80(overbought) during an uptrend. If the RSI is below 20(oversold) during a downtrend. This makes logical sense when you think about it. OF COURSE when there's an uptrend, the price action will . And I think it goes without saying, but don't ever rely on simply one indicator alone.
Let's see whether this reversal can take place, or if ETC will dip even farther to the 19s or 14s
Stay healthy folks <3
-Doc
Comment:
also, apologies for the switchup to Ichimoku.. just like it a lot better. I'll post at a later date explaining it more.
So let's be clear here... positive divergence never guarantees a reversal, just makes it more likely. Another thing to note this time around is that MACD is getting closer to 0 as well, which in the last positive divergence it was absolutely in the dumps.
As usual... i'll keep you updated but until then... don't watch!
-Doc