Ethereum Classic - ETC touch $37.5 again what is next
Disclaimer: The following analysis is the sole opinion of the writer and should not be considered investment advice.
Ethereum Classic [ETC] has rallied significantly over the past two weeks as the bulls refuse to let the price drop below the $30 mark. They were able to drive a rally to $42 before facing rejection.
News of the merger could also have an impact as miners switch to ETC, leading to an increase in the hash rate of PoW coins. This rate has been increasing since mid-August, but prices have not kept up with these developments. The drop of Bitcoin [BTC] a day earlier did not help the bulls either.
ETC- 1-Day Chart
The price chart shows two things. One, ETC remains in a long-term downtrend. Despite the strong gains in July and August, the price failed to break the previous high, which will return in September 2021.
There have been sizable rallies between these moves lower. Since November of last year, ETC has posted highs of $64, $52, and $46, each lower than the last.
Another thing the chart shows is that ETC is in a key supply and demand zone. The $35-$37 area has acted as a resistance since the beginning of 2022. The $50 area is also an area of increased importance on the timeframe.
A set of Fibonacci retracement levels (yellow) are plotted based on the ETC drop from $52.66 to $12.47. It shows that the 78.6% and 61.8% retracement levels are at $44.06 and $37.31. Furthermore, these levels have also been respected by the price in the last few trading weeks.
Indicators suggest that there is still some bullish bias behind Ethereum Classic. The Relative Strength Index (RSI) has managed to stay above the neutral 50 level despite the volatility over the past two weeks. This suggests that the bullish momentum may continue to favor the bulls.
On the other hand, OBV is pretty flat. He showed roughly equal buying and selling volume last month and hinted at a lack of dominance in either sector.
According to this finding, Chaikin Money Flow (CMF) also entered the country in neutral territory. It even dropped below -0.05 indicating a significant capital outflow from the market.
On the other hand, the Directional Movement Index (DMI) shows that September saw a strong uptrend for ETC.
Indicators show some upside momentum, but lack consistent strong demand from buyers. The price action highlights that the $37 and $50 areas are of particular importance, with the expected Fibonacci retracement level also acting as support and resistance.
Bitcoin has the potential to greatly affect ETC in the coming weeks. In turn, Bitcoin will also be affected by the global markets. The failure to control inflation in the US could prompt a move lower next month.
Sep 15, 2022