Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Ethereum Classic managed to discourage short-sellers from taking positions after it negated a descending triangle setup. A northbound breakout backed by strong volumes saw ETC maintain a position above $67 as the altcoin set its sight between $69-$70.7.
To initiate drawdowns, sellers would need to enforce a close below ETC’s weekly and daily 20-SMA (red) before any chances of a throwback to $64.7. At the time of writing, ETC was trading at $67.65, down by a marginal 0.5% over the last 24 hours.
Ethereum Classic 4-hour Chart
Source: ETC/USD, TradingView
ETC’s hike above $67 pushed the price within August’s descending triangle setup. Back in late August, ETC formed lower highs at $70 and $69.5 and eventually broke below $66.8. This move triggered a 7% market retracement. Going forward, ETC would need to target the aforementioned higher highs in order to challenge its local high of $77.3.
In case of a southbound retreat, ETC seemed to have plenty of defensive options. Support lines of $66.8 and $64.7 would allow bulls to maintain near-term control. The daily and weekly 20-SMA could also induce some buying.
Reasoning
The On Balance Volume highlighted a healthy level of buying pressure over the past few weeks. The index traded above its late-June levels when ETC registered a 70% hike in value to $62.8. This safeguarded ETC from an extended near-term decline.
The Relative Strength Index pointed south from 60 and headed towards equilibrium. However, the Awesome Oscillator did register a series of red bars and buyers cooled off over the past few sessions.
Conclusion
Since both the RSI and Awesome Oscillator moved towards their respective half-lines, the ETC market was balancing out between buyers and sellers. This pointed to a consolidation phase going forward.
When volatility does return, ETC can be expected to climb above $70 due to the underlying buying pressure. Meanwhile, traders should wait for further developments before entering a position.
