- Ethereum Classic’s (ETC) bullish market instinct faced a critical test recently.
- The short-term indicators pointed towards a potential bearish shift in momentum.
- ETC struggled to maintain its support level amidst volatile market conditions post the unfavorable U.S. May Jobs Report.
Explore the recent challenges faced by Ethereum Classic (ETC) as it grapples with preserving its bullish market structure amid wavering economic signals.
The $29 Support Level Fails to Sustain
Ethereum Classic recently tried to hold its ground around the $25.19 support, a critical threshold established on May 13. However, the price plunged to $25.07 on June 7 without conclusively falling below this level on a daily closing basis. This fragile balance, while offering a faint glimmer of hope for the bulls on higher timeframes, indicates a precarious situation.
Bearish Momentum Indicators Emerge
Technical analysis reveals early signs of a bearish shift. The Directional Movement Index (DMI) indicated bearish momentum as the -DI line surged past the 20 mark. Coupled with a dip in the Chaikin Money Flow (CMF) to -0.09, this suggests significant outflows and selling pressure persisting over the past week. These indicators collectively signal potential bearish dominance unless a reversal occurs.
Bearish Sentiment Dominates the Futures Market
Over the span of the past ten days, Ethereum Classic witnessed an upward trajectory from $31 to $28.6. However, a surge in selling activity driven by Bitcoin’s market movements led to a drastic 14.32% drop in ETC’s value within a 4-hour trading window, although it subsequently rebounded from $25.07 to $27.
Open Interest and Volume Indicators Reflect Market Hesitancy
The futures market mirrored this bearish outlook. A notable decline in Open Interest, synchronized with the falling price, highlighted traders’ reluctance to engage amidst heightened volatility. The continuous downtrend in the spot CVD reinforced the selling pressure narrative, reflecting a consensus towards persistent bearish trends.
Conclusion
In summary, Ethereum Classic navigates a challenging landscape as it attempts to stabilize above key support levels. Despite momentary bullish streaks, technical indicators and market movements signal a pronounced bearish sentiment. For ETC to regain and maintain bullish momentum, a substantial shift in trading behavior and renewed market confidence would be essential. Investors should monitor these developments closely, weighing potential risks against future recovery prospects.
