Dogecoin (CRYPTO: DOGE), Ethereum Classic (CRYPTO: ETC) and Ethereum (CRYPTO: ETH) broke up from a descending trendline on Wednesday, which indicates a trend change. A descending trendline acts as a resistance level and indicates there are more sellers than buyers even though the price continues to fall.
In order for a trendline to be considered valid, the stock or crypto must touch the line on at least three occasions. After that, the more times the trendline is touched the weaker it becomes.
- Bullish traders can watch for a stock or crypto to break up from the descending trendline and, if the break happens on high volume, can indicate the downtrend is over and a rally may be on the horizon. It’s possible the stock or crypto may fall down to back-test the descending trendline as support before heading higher again.
For bearish traders “the trend is your friend” (until it’s not) and a touch and rejection of the descending trendline can offer a good short entry. A bearish trader would stop out of this type of trade if the stock or crypto broke above the trendline.
The Dogecoin Chart:
The Ethereum Classic Chart:
The Ethereum Chart: