Why ETC is set for a possible correction if the bulls fail to step in at…
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
Source: TradingView, ETC/USDT
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.
Rationale
Source: TradingView, ETC/USDT
The RSI declined below the midline whilst keeping its trendline resistance intact. A close above the line could
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