Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Panic selling was observed all across the altcoin market after Bitcoin plummeted to $45,000. Ethereum Classic, which has enjoyed a bit of a bull run of late, suffered an 18% decline over the last 24 hours. A crucial support zone was breached in the process as the price dropped towards its July-levels.
A few areas stood out on ETC’s 4-hour timeframe. These zones can stop further bleeding in the market.
Ethereum Classic 4-hour Chart
Source: ETC/USD, TradingView
ETC’s losses were aggravated not only by a broader market sell-off, but also due to a double top formed at $77.5. This bearish pattern was confirmed when the price formed two identical peaks and a break below a critical support area – In this case $58.6.
At the time of writing, the price had moved to its early-July levels. However, a single candlewick did drop as low as $48.2, marking a 1-month low for the digital asset. With respect to ETC’s near-term trajectory, much focus would be on support areas of $53 and $48. If buyers puncture through both these defenses, ETC could tumble all the way to its 20 July swing low of $37.86.
In case of a bounceback, ETC would need to close above $61.2 to attract more buyers to the market.
Reasoning
The Awesome Oscillator fell sharply below the half-line and matched levels last seen in June when ETC dropped to a 2-month low of $32.3. Moreover, the ADX was pointed north from 46 and identified a strong bearish market trend.
Even the Relative Strength Index was under immense pressure. The index witnessed almost a vertical drop into the oversold territory. This failed to trigger a bullish response.
Conclusion
ETC seemed to be in lieu for an extended sell-off all the way towards $37.86 if buyers fail to counter selling pressure. Support areas at $53, $48, and even $40 may aid the price, but there are many uncertainties in the market.
The RSI’s oversold nature had not led to a reversal at press time and this was concerning. A broader market revival could be the answer for ETC going forward.
