Ethereum Classic is on a strong uptrend, but these lows could be revisited

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

Why has Ethereum Classic seen a wild surge in prices in the past week and a half? It could be down to many factors. One of them was the anticipation of the “fifthening” on 15 April 2022, when block rewards are reduced by a fifth (20%). There is also the narrative that Ethereum’s move to Proof-of-Stake drives miners to ETC, but since there has been no large increase in mining difficulty on the network, this narrative might not hold much water.

Ethereum Classic (ETC)

Source: ETC/USDT on TradingView

Ethereum Classic has been strongly bullish in the past ten days and has registered a nearly 75% gain. Longer timeframe charts showed that ETC has broken past key levels of resistance at $38, $41, and $44 within a span of a few days.

Was this surprising? Hindsight is 20/20 so “no” is a dishonest answer. However, analysis of the 4-hour timeframe showed that the market had broken its long-term bearish market structure in early February after scaling past the local highs at $34. Since then, the price found support at $23.5 and has rallied hard.

In the next few days, the higher lows at $42.12 and $35.06 can be areas to buy ETC at. However, a session close below $42 will likely see ETC drop toward $35, and will mean that the short-term bias has flipped to bearish.

Rationale

Source: ETC/USDT on TradingView

Was ETC bearish yet? No. However, the RSI was below neutral 50, while the MACD formed a bearish crossover and dived below the zero line. This signaled a possible short-term downtrend/pullback in store for ETC.

The OBV has been trending higher in the past week, as expected. However, alongside the momentum, the OBV has also fallen slightly in the past couple of days.

Conclusion

The market structure, near-term and longer-term, was bullish. In the next few hours, a session close below $42.12 could see ETC pull back toward $38.6 and $35.06. There has been some selling in the past couple of days but it hasn’t broken the uptrend yet. The long candlewick to the upside in the past few hours could be a warning sign to the late buyers.