Disclaimer: The information presented does not constitute financial, investment, trading or any other type of advice and is solely the opinion of the writer.
Global stock market indices have been in free fall for the past two weeks. Bitcoin has also suffered serious losses over the same period, dropping nearly 35%. Against this backdrop, the altcoin market has also rapidly lost value. Ethereum Classic saw a bullish market structure break in the short term. Still, this probably wouldn’t be enough to reverse the strong downtrend for the altcoin.
ETC – 4 Hour Chart
The H4 chart shows that the price has hit a series of lower highs since late May. What is not shown in the charts is that this downward trend goes back to early April.
At the time of writing, there were two zones of still resistance for ETC. The top one was $18 and the bottom $14.8, both marked by red boxes. In addition, the 38.2% Fibonacci retracement level added confluence to the $18 resistance zone.
ETC broke past the $15.3 level in the past few trading days. This made the market structure turn bullish in the short term. The USD 13.89 support also appeared to be defended.
Still, the higher time frame bias remains strongly bearish. Therefore, a shorting opportunity could present itself soon.
ETC-1 Hour Chart
The H1 chart highlighted the bullish structure flip, but the USD 16.15 level has not yet been beaten. In fact, the rise from this level the previous day before a lower move suggested that the trend was clearly bearish.
Therefore, the entire $14.6 to $16.1 region can be used to enter a short position. Bearish divergence on a timeframe higher than the H1 could provide a more accurate entry.
The RSI on the hour battled the neutral 50 mark. Even if the hourly RSI climbs higher, it would not suggest a trend reversal. The OBV saw a spike higher on the previous trading day, while the CMF climbed to -0.04.
Taken together, it suggested the presence of some buying pressure. Still, there was no overwhelming pressure, and it may not have signaled a trend reversal to the bullish side.
The preference for higher time frames remains bearish despite the bullish break on the lower time frames. The $16.15 level remains unbroken and the $14.8 is also a resistance zone.
Therefore, a short position can be scaled between $14.8 and $16.1, with a stop-loss just above $16.3. In the south, the 23.6% Fibonacci extension level at $10.13 could be a bearish target.
This post Can Ethereum Classics? [ETC] breakout trigger a rally or is it a bull trap?
was published first on https://ambcrypto.com/can-ethereum-classics-etc-breakout-trigger-a-rally-or-is-it-a-bull-trap/