Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Ethereum Classic’s Magneto hard fork is inching closer to the deadline of 21 July. The upgrade is designed to optimize gas fees and transactions and also amplify security. While the cryptocurrency heads towards its next major upgrade, its price has mostly remained subdued over the last 10 days due to the lack of volatility.
At the time of writing, ETC was valued at $49.80, down by a marginal 0.54% over the last 24 hours.
Ethereum Classic 12-hour chart
Ethereum Classic snapped a 2-month low when its price fell as low as $32.18 on 22 June, but a rally soon followed. 23 May’s swing low of $40 eventually triggered the next big move for ETC and a 60% surge pushed the price towards the $64.5-level.
However, the market has remained quiet since making this move and the price has gradually declined within the confines of a down-channel. ETC managed to contain recent losses above $48, but this area remains vulnerable to a breakdown, as highlighted by the lack of activity on the Visible Range.
The Relative Strength Index has formed lower highs since 29 June as a downtrend was in effect. The index can be expected to continue its journey south and reverse trajectory from close to the oversold zone. The Squeeze Momentum Indicator noted a series of red bars below the half-line, but the lack of volatility kept losses in check. However, consecutive white dots would indicate a ‘squeeze release’ and amplify ETC’s decline over the coming days.
The Directional Movement Index was suggestive of a bearish trend as the -DI maintained itself above the +DI.
The aforementioned factors suggested that the bears were gearing up for a sharper decline over the coming days, one that could see ETC head back towards its 23 May swing low of $40. Further below rested another defensive line of $31.28, one that could be called into action. Once buyers return to the market, gains would likely be restricted below the strong resistance line of $63.5.
ETC’s press-time support level of $48.5 was vulnerable to a breakdown and defensive lines of $40 and $32.18 could be in focus over the course of next week. Traders can enter long trades at the aforementioned support levels and exit their positions at the $63.5 price ceiling.
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