Disclaimer: The findings in the following analysis are the sole opinions of the author and should not be taken as investment advice.
The response to Ethereum Classic’s surge to a nearly 12-week high at $ 77 has been quite brutal. Since making the move, the altcoin has suffered a drastic pullback, retreating 20% to $ 61.5. In addition, the market was exposed to another sharp decline. Right now, the bulls need to take certain steps to turn the tide in their favor.
At the time of writing, Ethereum Classic was trading at $ 64.2, down 7% in the past 24 hours.
Ethereum Classic 4-hour chart
The Fibonacci tool was used on the ETC July 12 low of $ 57.5 and the August 17 high of $ 77.3 to plot important levels on its 4-hour chart. At press time, ETC had found support at its Fibonacci level of 38.2% ($ 62.2) and renewed buying pressure could allow the alternative to rise towards the $ 68 mark.
The 50% retracement level, which often confirms or denies the direction of a trend, is also an important area to watch. If ETC records a close below $ 57.24, the bears would likely initiate further drawdowns. This would have a drastic effect on the alt’s medium-term outlook.
The ETC indicators maintained their bearish position, but there were also some signs of bullish resistance. The Awesome Oscillator moved below the mean line on August 18 for the first time in 15 days. However, its peaks held steady, implying that the bulls were countering the selling pressure.
Interestingly, the MACD histogram noted a pullback in bearish momentum. Meanwhile, the -DI of the Directional Movement Index traded above the + DI as the bears kept a grip on market procedures.
ETC’s 38.2% Fibonacci level ($ 62.2) coincided with the selling pressure, but the bears were in a position to threaten another breakout ahead. In such a case, the focus would be on the 50% retracement level ($ 57.24). The safest bet for traders would be to let the market develop before entering a long or short position.
This is a machine translation of our English version.
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