- Ethereum Classic is likely to face rejection at its former support zone
- OBV and Open Interest showed buyer enthusiasm was low
Ethereum Classic [ETC] has retraced all of the gains it made during the rally from January to March. Back then, the altcoin’s price had risen from $18.33 to $39.67 at the apex. Alas, the market’s buyers have been underwhelming since then.
The fall below the $22.9-level meant that a new bearish move seemed more likely than a recovery. Here are the levels and scenarios that ETC swing traders need to watch out for.
Former support level is now the short-term bullish target
Source: ETC/USDT on TradingView
In April and again in June, the 78.6% retracement level at $22.9 was tested and defended as support. However, the Awesome Oscillator and the price action revealed that a strong downtrend was in play in June.
Support levels at the 50% and 61.8% retracement zones were lost quickly to sellers and in July, the bears marked another victory by forcing a descent below $22.9. The recent bounce from $18.3 doesn’t mean the bulls are winning though.
Instead, Ethereum Classic swing traders would want to take short positions around the $23.2-$24.1 zone. More conservative bears can wait for a bearish engulfing candle to go short. With the OBV just barely above its three-month support level and the AO resolutely below neutral zero, the bearish argument is very convincing.
Open Interest at its lowest since October 2023
Source: Coinglass
The weakness of the bulls was captured by the Open Interest chart. Alongside the price, the OI has slid persistently and stood at $89.7 million at press time.
Despite the 10.6% price hike over the past week, the speculators did not seem too keen to bid.
Source: Coinalyze
Additionally, the spot CVD halted its downtrend over the past week and was slowly climbing higher at press time. The funding rate was positive, underlining the presence of bullish sentiment.
Read Ethereum Classic’s [ETC] Price Prediction 2024-25
The short liquidations on 8 July after the rejection from $21 suggested a liquidity hunt. Traders should be on the lookout for a price surge that takes out short positions, as that might warn of a liquidity hunt in the opposite direction during the move towards the $23 resistance zone.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
