Will Ethereum Classic’s [ETC] recovery from this significant level sustain
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Ethereum Classic has been in a downtrend throughout April, although this trend has been interspersed by strong bounces in price. In the past two weeks, ETC has been sliding lower down the charts, and the $30.6-$32 served briefly as support before succumbing to bearish pressure. At press time, this zone was being contested by the bears, and momentum looked to be on the side of the buyers.
ETC- 1 Hour Chart
In late February and mid-March, the $25.2 and $27.5 levels have acted as support. Ethereum Classic tested these levels before the rally to the $52.5 highs. Hence, ETC has visited an area of historic significance and seen a sharp bounce upwards.
On lower timeframes, the market structure has been flipped from bearish to bullish after ETC broke past the $28.3. The price continued to climb higher and faced resistance at the $32 area.
The $30.6-$32 area was important on the way down the charts, and it could be important on the way up as well. ETC could consolidate within this zone before breaking upward once again.
Rationale
The momentum indicators noted a reversal in the previous bearish momentum a couple of days ago, as both the AO and the MACD rose back toward the zero line and continued to stay there for a good portion of the 2nd and 3rd of May. This was the same time period where ETC found some demand in the $25.5-$26.5 area.
The moving averages also showed the momentum to be neutral. The 21 and 55-period moving averages (orange and green respectively) snaked about each other on the hourly chart, before following the decisive surge of ETC in the past couple of days.
The A/D indicator also rose higher alongside the price, to show the presence of buying volume behind the rally from the $25 lows.
Conclusion
The previously bearish market structure was broken, and a bullish one remained intact. There was demand behind the rally, and the $30.6 level could have some importance in the next day or two.
Ethereum Classic could consolidate just above $30.6 before climbing higher once more.
