Ethereum Classic (ETC) steadily withdrew in a descending channel (yellow) for over three months. Post which, the bulls initiated a breakout but quickly went on the back foot again.
Despite the recent rejection of lower prices, the 20 EMA (red) and the upper trendline of the descending triangle offered strong resistance over the past month. Thus, a retest of the flatter $24-support before a trend commital move seemed possible for ETC in the days to come. At press time, the alt traded at $27.27.
ETC Daily Chart
The down-channel retracement saw a nearly 66.9% fall as it pierced through vital price points. For instance, the bears flipped the $34-mark from support to resistance.
However, ETC noted an over 75% ROI from its nine-month low on 22 January as it jumped above its 20/50 EMA’s. But, it struggled to overturn the $34-mark as it formed a bearish divergence (white trendline) with its RSI. the bears refrained from giving up their control.
Over the past five weeks, ETC has been aggressively marking lower peaks while testing the $24-support. Thus, forming a descending triangle that reaffirmed the increasing bearish tendencies. To top it up, a recent bearish engulfing candlestick created a strong supply zone in the $27-$30 range.
Now, while a reversal from this range is likely, ETC aimed to continue its squeeze towards the $24-mark. Any bounce from this mark could find resistance at the upper trendline of the triangle before the alt conforms to its bearish tendencies. Any close below the $24-mark would confirm the breakdown and trigger a shorting signal.
The RSI declined below the midline whilst keeping its trendline resistance intact. A close above the line could propel a near-term recovery. Hence, the sellers needed to protect the equilibrium to prevent any revival chances.
Also, the CMF dipped below the zero-line, affirming the increasing selling edge. This reading depicted the underlying perception for the crypto that favored the bears. Nevertheless, the ADX for ETC was on a downslide and confirmed a fragile directional trend.
Considering the heightened bearish tendencies in the last five weeks reflected by the formation of a descending triangle, ETC could brace for a setback towards the $24-mark. After which, the bulls needed to step in to prevent a substantial fall towards the $22-mark.
Besides, the broader market sentiment and the on-chain developments would play a vital role in influencing future movements.