Ethereum Classic (CRYPTO: ETC) plunged over 12% at one point on Wednesday, as an overreaction to Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), which were declining about 3.5% and 5%, respectively.

• For bearish traders, the "trend is your friend" (until it's not) and the stock is likely to continue downwards. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.
• Bullish traders will want to watch for a break up from the upper descending trendline, on high volume, for an entry. When a stock breaks up from a descending channel, it's a powerful reversal signal and indicates a rally is likely in the cards.

• When Ethereum Classic hit the low-of-day at the $39 level, it dropped to the lower descending trendline of the falling channel, where the crypto ran into a group of buyers and wicked up from the level, which further indicates the pattern is being recognized.
• If the crypto closes the 24-hour trading session near its low-of-day price, Ethereum Classic will print a bearish Marubozu candlestick, which often indicates lower prices will follow but because Wednesday’s sell-off was large, the most likely scenario is for an inside bar to develop in consolidation.
• If the crypto continues to hold the lower trendline as support, it’s likely Ethereum Classic will eventually bounce up to test the upper trendline again as resistance.
• Bullish traders would like to see the crypto regain the 200-day simple moving average as support to indicate long-term sentiment remains bullish. If Ethereum Classic closes the trading session below the 200-day, it could fall bearishly through the falling channel.
• Ethereum Classic has resistance above at $41.41 and $44.66 and support below at $38.95 and $35.38.