Ethereum Classic ETC price has been quietly designing an inverse head-and-shoulders pattern level on the 4-hour chart that projects a price rally beyond the May 6 high at $158.76. ETC is close to completing the support pattern, so investors need to capitalize on the opportunity.
From May 2 to May 6, the ETC price catapulted 200% from a cup pattern, quickly delivering the largest 4-day price gain since trading began in 2016. The rally nearly touched the 361.8% extension of the significant 2018 decline at a price of $161.33.
Initially, ETC appeared to be shaping a pennant, a continuation support pattern that commonly follows steep advances. However, the general selling pressure in the cryptocurrency market undermined the pattern and knocked Ethereum Classic ETC price down 50% from the rally high to the May 12 low at $78.25.
Over the last five days, Ethereum Classic ETC price has been engaged in a bottoming process around the 61.8% Fibonacci retracement at a price of $90.02. The process has revealed an inverse head-and-shoulders pattern level with some resistance being offered by the 50 four-hour simple moving average at $108.17.
The volume, or the accumulation/distribution profile, during the pattern development, has been consistent with the precedents of successful price breakouts, raising the probability that the support pattern will resolve to the upside.
The measured move target of the inverse head-and-shoulders pattern is at $168.41, yielding nearly 50% from the current position of the neckline. An ETC rally of that magnitude would lift Ethereum Classic price beyond the May 6 high and the 361.8% extension of the 2018 decline.
If the momentum is similar to the preceding uptrend, Ethereum Classic ETC price may approach the 138.2% extension of the May decline at a price of $189.51 or even the 461.8% extension of the 2018 decline at $205.01.
The bottoming process remains intact unless the Ethereum Classic price notably declines below the 61.8% retracement level at $90.02. It would disrupt the pattern symmetry and leave ETC exposed to a new price correction low.
A resumption of the collective sell-off in the cryptocurrency market will undoubtedly impact Ethereum Classic and put the bullish outlook on hold until a new bullish ETC pattern emerges.
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