Connect with us

Analysis

ETC: Dollar-cost averaging can be used to enter long all the way down to…

Published

on

Ethereum Classic nears range lows, offers a buying opportunity despite the downtrend
Source: Pixabay

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the opinion of the writer.

Over the past month, Bitcoin [BTC] has formed a range between $22.6k and $18.8k, with some heavy resistance at $21.8k as well. The rest of the altcoin market also formed a range. Ethereum Classic [ETC] was one of these coins. It offered a relatively low-risk buying opportunity to enter at the range lows.

ETC- 12-Hour Chart

Ethereum Classic nears range lows, offers a buying opportunity despite the downtrend

Source: ETC/USDT on TradingView

ETC formed a range from $13.55 to $17.55. The mid-point of the range lay at $15.5, and over the past month, this level has been respected as both a support and a resistance level.

Before June, Ethereum Classic had been in a downtrend stretching back to early April. The market structure remained bearish, as none of the significant lower highs have yet been broken. On the contrary, a level of support from the mid-May crash was retested in the recent bounce to $17.5.

ETC- 4-Hour Chart

Ethereum Classic nears range lows, offers a buying opportunity despite the downtrend

Source: ETC/USDT on TradingView

The four-hour chart showed a bullish order block for Ethereum Classic at the $13 zone, highlighted in cyan. This bullish order block sat right beneath the range lows.

Hence, even though the short-term trend over the past week was downward, it looked like a bullish move back above $15 could materialize.

Ethereum Classic nears range lows, offers a buying opportunity despite the downtrend

Source: ETC/USDT on TradingView

The indicators on the four-hour chart pointed toward a bearish bias for Ethereum Classic. The Relative Strength Index (RSI) fell back beneath neutral 50 in the past week, while the Stochastic RSI raced toward the overbought territory. The On-Balance-Volume (OBV) has declined over the past two weeks.

Without strong demand, a rally might not occur in the next few days. Hence, apart from the $13 area, the OBV was also an indicator to keep an eye on. The Chaikin Money Flow (CMF) fell beneath the -0.05 mark a few days ago. This showed significant capital flow out of the market.

Conclusion

Even though the four-hour indicators showed a bearish bias for Ethereum Classic, the bullish order block at the range lows was a decent opportunity to enter a long position. A tight stop loss at the $12.2-$12.8 area can be used. Dollar-cost averaging can be used to enter a long position all the way down to $13.

However, since this trade would go against the trend, it could be riskier. Therefore, the position must be sized more carefully.

Read the best crypto stories of the day in less than 5 minutes

Subscribe to get it daily in your inbox.


Please select your Email Preferences.

Akashnath is a Chemical Engineering graduate deeply fascinated by Technical Analysis and the crypto markets and enjoys studying price movements and trying to find patterns.

Click to comment

Leave a Reply

Your email address will not be published.

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.