Ethereum Classic soars 17% – What’s fueling ETC’s 6-month high?
Ethereum Classic 17% to a 6 month high of $25.59 amid sustained demand. Sell side risk is however rising as holders cash out
Key takeaways
Ethereum Classic surged 17% to $25.59 with $1 billion volume and $3.9 billion market cap, at press time. Despite overbought RSI and rising shorts, strong buying and accumulation could push ETC toward $29 or trigger a pullback.
Ethereum Classic [ETC] soared 17.27% hitting a 6-month high of $25.59 before slightly retracing to $24.8 at press time.
Over the same period, trading volume surpassed $1 billion, representing a 290% increase, reflecting a significant capital inflow. Equally, the altcoin’s market cap reached $3.9 billion for the first time in 6 months.
But why is ETC showing resilience amid a broader market correction?
Ethereum Classic buyers return with strength
Interestingly, while buyers have taken a step back across the Cryptocurrency market, Ethereum Classic has seen increased demand.
On the 18th of July, ETC saw a Spot Buy Volume of 3.57 million, compared to a Sell Volume of 3.08 million, according to Coinalyze.
The same pattern was observed on July 19th, with the altcoin recording 685k in Buy Volume compared to 623k in Sell Volume.
As a result, the Spot market recorded two consecutive days of positive Buy-Sell Delta, at 492k and 61k, respectively.
Derivatives betting against the rally
Notably, while buyers rushed into the market, it seems they also took strategic positions, awaiting the next move.
According to CoinGlass, Ethereum Classic’s Open Interest (OI) jumped by 28.2% to $313 million, while Derivatives Volume Soared 213.5% to $2.43 billion, as of writing.
Typically, when OI and Volume surge in tandem, it signals growing participation in the Futures market and high capital flow as new positions open.
Surprisingly, despite the price uptick, it seems investors rushed into the futures to bet against the rally. Long Short Ratio has failed to flip 1, and it’s currently sitting around 0.97.
When the long-short ratio is below one, it implies that more investors are opening short positions than long positions.
Profit taking surges
Unsurprisingly, as ETC rallied, so did the appetite to realize profit. According to CoinGlass, Exchange Netflow soared to $10.37 million, then dropped to $1.28 by press time.
Such a massive uptick in Exchange Netflow suggests that investors who have been underwater for the past six months are aggressively cashing out.
Historically, such investor behavior has preceded price decline as downward pressure on prices mounts.
Can bulls hold on?
According to AMBCrypto’s analysis, Ethereum Classic held strong despite market volatility as buyers flowed into the market to accumulate.
As a result, the altcoin’s Stochastic RSI surged to 100, indicating an overbought condition. Likewise, the Relative Strength Index (RSI) surged to 86, also reaching an overbought level.
When these momentum indicators both reach overbought levels, they confirm a higher buying pressure but also warn of increased volatility.
Despite this, if buyers continue to accumulate, Ethereum Classic is likely to regain its upward momentum and target $29.
However, if momentum fades due to buyer exhaustion, we will likely see a pullback to $20.80.
