- Ethereum Classic [ETC] may encounter resistance at its previous support level.
- Indicators such as OBV and Open Interest reveal limited buyer enthusiasm.
- ETC has retraced gains from its January to March rally, indicating a bearish trend.
Discover the potential challenges ahead for Ethereum Classic [ETC] as it faces key resistance levels and evaluates market trends.
ETC’s Former Support Level as a Bullish Target
The price rally from January to March saw Ethereum Classic [ETC] rising from $18.33 to $39.67. However, this progress has since reversed. The breach below the $22.9 support level suggests a continuation of bearish trends rather than a recovery. Traders should closely monitor key levels to make informed decisions.
Bearish Indicators: OBV and Awesome Oscillator
In April and June, ETC defended the 78.6% retracement level at $22.9. However, subsequent price actions and technical indicators point to a strong downtrend. Notable support zones at 50% and 61.8% retracement levels quickly gave way to sellers. The bears further established their dominance in July by pushing prices below $22.9. The current rebound from $18.3 does not signify a bullish trend; swing traders are advised to consider short positions in the $23.2-$24.1 range, waiting for confirming signals such as bearish engulfing candles.
Open Interest and Market Sentiment
The Open Interest (OI) chart illustrates the lack of bullish activity, with OI dropping consistently and registering $89.7 million. Despite a recent 10.6% price increase over the past week, speculative interest remains tepid. Nevertheless, the spot CVD has halted its decline and is gradually climbing, accompanied by positive funding rates, indicating a modest bullish sentiment.
Potential Liquidity Hunt
Short liquidations on 8 July, following the rejection at $21, imply a liquidity hunt scenario. Traders should anticipate a potential price surge targeting short positions before moving towards the $23 resistance zone, signaling a potential liquidity squeeze in the opposite direction. It’s crucial to remain vigilant for such market movements.
Conclusion
Ethereum Classic [ETC] currently faces significant resistance at its former support levels. With key indicators pointing towards a bearish trend, traders should approach with caution. Strategic positions and vigilant monitoring of market signals will be paramount for navigating the upcoming challenges in the ETC market.
