Ethereum Classic was in recovery mode after a symmetrical triangle breakdown triggered a 12% decline. An uptick in trading volumes and buying pressure allowed ETC to climb back above its short-midterm moving averages. The emphasis is now on certain swing highs that snapped during ETC’s symmetrical triangle formation.
Now, the ultimate short-term goal is at the 3-month high of $77.37, from where sharper gains can be realized. At the time of writing, ETC traded at $65.8, up by 9% over the last 24 hours.
ETC 4-hour Chart
Source: ETC/USD, TradingView
The 200-SMA (green), which can often trigger a price reversal, was called into action as ETC recovered from a two-week low of $58.7. A resistance zone comprising of a few swing highs would be ETC’s immediate challenge. These swing highs exist within the $67-$71 range.
A decisive close above these levels, with strong volumes, would pave way for an extended rally, from where $77.4 will be targeted next. Overall, this would result in another 16% hike for ETC from the existing level. In case the aforementioned resistance denies further upside, ETC will need to trade above $62-$63.4 to maintain bullish control, whereas a close below $58.7 will invite additional short-sellers.
Reasoning
The Relative Strength Index witnessed a strong rebound from oversold zone and traded back above 60. This heightened the chances of an extension towards the upper zone before a reversal. Meanwhile, bullish crossovers were observed on the MACD and Directional Movement Index.
Such signals spur additional buying in the market. Here, it is also important to mention the fact that ETC traded above daily 20-SMA (not shown), which is expected to play in favor of the buyers.
Conclusion
ETC looked set to challenge $67-$71 resistance over the coming sessions. A close above this zone could push prices all way towards the $77.4-mark. Further, it is important to watch out for trading volumes as well. However, traders must observe how ETC interacts with the incoming resistance area before entering a position.
