Bitcoin (BTC-USD) and Ethereum (ETH-USD) are often considered the two leaders in the cryptocurrency space. To some investors’ surprise, the group has been trading quite well and actually began to rally a few days before the rally we saw in mid-March. However, many might not be familiar with the smaller version of Ethereum: Ethereum Classic (ETC-USD). That too has been trading well.
So what is Ethereum Classic? According to Investopedia:
“Ethereum Classic (ETC) is an open-source, decentralized, blockchain-based distributed cryptocurrency platform that runs smart contracts. Ethereum Classic was formed in 2016 as a result of a hack of The DAO, a smart contract operating on the Ethereum blockchain. The original blockchain was split in two, with the majority of users choosing to reverse the hack and return the stolen funds.”
Additionally, Ethereum Classic describes itself as the following:
“By combining the technology of ETH with the philosophy of BTC, ETC is uniquely positioned to be the Smart Contract Platform of the future, as other chains become compromised or captured by special interests.”
Like other cryptos, Ethereum Classic had been trading pretty well. It rocketed off March lows near $25 and briefly eclipsed $50. So while everyone seemed to be watching the Nasdaq, ETC and others quietly posted significant gains.
With the recent decline, Ethereum Classic has retraced half of the rally and is trading back into the rising 50-day moving average. It’s a bit of a mixed bag though, as it’s below the rest of its key daily moving averages (the 10-day, 21-day and 200-day) as well as the daily VWAP measure.
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From here, I want to see if it can hold the 50-day moving average and 50% retracement. If it can do that, the $40 area becomes key for investors. That’s where it finds the 200-day and 10-day moving averages as well as the daily VWAP measure.
Above $40 opens the door up to the $43.50 to $45.50 area, as well as the 21-day moving average.
On the downside, keep an eye on the $33.25 area if Ethereum Classic loses the 50-day. Near that mark, the crypto will find the 61.8% retracement. Below that, we’ll have to consider a possible test of uptrend support.
We recently looked at Bitcoin as well. While it has support nearby, it risks a larger decline down into notable support.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
