Ethereum Classic [ETC] crashes past $27.3, but traders might need to be cautious
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
- Ethereum Classic has already seen rejection at the $29 mark
- $27.3 also flipped to resistance, a retest could offer traders an opportunity
Ethereum Classic [ETC] has been in a downtrend since early September. There have been significant short-term bounces in between, many of which measured close to 10%. However, the larger timeframe structure remained bearish, despite the rise in the hash rate for the network. It remained so for Ethereum [ETH] as we head into a new week.
Here’s AMBCrypto’s Price Prediction for Ethereum Classic [ETC] in 2022
Furthermore, 10 October could see ETC establish a range for the week, based on the day’s high and low. In the meantime, Bitcoin [BTC] saw the Bollinger Bands (BB) pinch on the one-hour price charts to show lowered volatility in the past two days.
Could a retest of $27.3 offer a 10% move down?
The lowered volatility around Bitcoin could be a sign that a strong move was imminent. The sentiment in traditional markets on 10 October would surely influence Bitcoin as well. Hence, traders should be wary of heightened volatility around the corner.
For ETC, the price action showed another bearish move could be in sight. The short-term support at $27.3 had held for a week, but the previous day of trading saw this level decisively broken. A retest of this zone would see sellers jump into the fray with abandon.
The Relative Strength Index (RSI) was well below neutral 50 on the two-hour chart to show strong downward momentum. The Stochastic RSI was climbing toward the 80 mark and a bearish crossover can be used to add confluence to a shorting opportunity. Invalidation of this bearish idea would be a session close above $27.62.
Steeply negative funding rates simmer down
In mid-September, the price crashed from $38.5 to $28.3 within the span of a week. The funding rate went wild around this time as short positions were a massive majority, However, in October the funding rate has been much closer to neutral than the previous weeks.
From late September to the time of writing, ETC also appeared to establish a range from $26.8-$28. This range was broken a few days ago when ETC climbed to test the bearish order block at $29. Subsequently, the price faced strong selling pressure and fell.
In the event that Bitcoin saw a fall below the $18.6k mark, it was likely that Ethereum Classic would see a sharp decline as well. Such a plunge could take ETC to $24.8, a significant support level beneath $26.6.