Selling on Ethereum Classic [ETC]? You can take advantage of these levels

  • ETC formed a symmetrical triangle chart and was in a bearish market structure.
  • A convincing break-down could find new support at $14.27.
  • An upward breakout and an intraday close above $20.28 will refute this prediction.

Ethereum Classic [ETC] It was on the rise before the stock market crash in early November. Apart from November 23, which encountered significant resistance at $20.28, ETC did not see another major rally.

At press time, ETC is trading at $18.80 in a moderate bullish momentum that could fade, given the bearish outlook on the technical indicators. More importantly, ETC has drawn a symmetrical triangle pattern that could lead to a bearish breakout.

ETC Forms Descending Triangle Pattern: Will Bears Take Charge?

Source: ETC/USDT on TradingView

ETC price action since November 10 has formed an asymmetric triangle. ETC is likely to see a downside breakout as the triangle pattern is in a bearish market structure.

Major technical indicators indicate that a downward breach is also likely. The Relative Strength Index (RSI) on the daily chart for ETC is below the neutral level, and is headed lower. In addition, the RSI moved in the lower range, indicating that the sellers had a significant impact on the market.

In addition, credit volume (OBV) posted lower and lower highs since August. This shows a steady decline in trading volume, undermining the strong buying pressure. Thus, the sellers have a huge opportunity in the market.

So a downside breakout of the triangle pattern is quite possible. If the breakout is successful, ETC could find new support targets at $18.02, $15.89, $14.27, and $14.05.

However, an intraday close above the USD 20.28 resistance level will counter this expectation. Such a convincing bullish breakout could lead ETC to a new resistance target of $24 in the coming days or weeks.

ETC has seen a drop in open interest on major exchanges

Source: Coinglass

According to Coinglass, ETC has seen a decrease in open interest since August. On Binance alone, the money flowing into the ETC futures market has dropped from $250 million in August to around $50 million at press time.

This represents a whopping 80% decrease in the funds flowing into ETC futures. A similar trend can also be seen on other major exchanges.

Source: Coinglass

This shows that investor expectations for ETC futures have declined since the third quarter of 2022. Therefore, it may take some time for the sentiment to turn positive.

Interestingly, sentiment in the derivatives market also affects the spot market. Therefore, the current downtrend for ETC may continue for some time. This will put downward pressure on the price of ETC.

However, if BTC regains the $17k mark and rises higher, ETC may see a bullish breakout and invalidate the above predictions.

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