Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Ethereum Classic (ETC) saw its value plummet in value as it pulled into a bearish channel (yellow) for nearly 16 weeks. During the downfall, the 20 SMA (red) assumed an important value area for traders/investors.
As of this writing, ETC saw a pattern breakout on Feb. 7, but failed to gain momentum as it watched an approach to the $28 zone after a bearish divergence with its daily RSI.
At the time of writing, ETC was trading at $31.06, down 4.5% in the past 24 hours.
Ethereum Classic Daily Chart
Source: TradingView, ETC/USDT
The latest bearish phase for the altcoin saw a retracement of nearly 67.4% as it pushed through numerous vital price points. For example, the bears managed to flip the $32 from the nine-month support to an immediate resistance. So revealing a dominant bearish influence.
Interestingly, ETC recorded an ROI of 42.62 percent (as of Jan. 26), which allowed it to break the pattern and test the $32 resistance on Feb. 7. But it struggled to gather strength and topple this level.
So, despite recent gains, ETC saw a reversal of the upper band of the Bollinger Bands (BB). It also coincided with the immediate resistance. To top it off, ETC formed a bearish divergence with the RSI, causing price action to reverse on February 8.
This trajectory would also mean that the altcoin will finally turn its relationship with the 20 SMA from resistance to support. Consequently, a test of the immediate support at the USD 28 level or the 20 SMA would likely be ahead of a bullish move.
In the event of a bearish breakdown or a change in Bitcoin’s perception, the bulls could halt the sell-off and initiate an immediate test of the $32.
rode
Source: TradingView, ETC/USDT
Although the RSI crossed the midline, it saw strong trendline resistance. The bulls still need more thrust to counter the prolonged bearish tendencies.
That said, the ADX has fallen steadily, meaning the strength of its direction is weakening. The bulls could take advantage of these increasing volumes and skip the gun by closing above $32.
Inference
Given the overbought values on the BB and the hidden bearish divergence with the RSI, ETC should brace itself for a likely retest near its 20-period MA (average of BB).
So, while ETC saw a long-term pattern breakout, a retest near the $28-$26 zone would likely precede a possible uptrend.
This post Ethereum Classic Could See These Levels Before a Possible Launch
was published first on https://ambcrypto.com/ethereum-classic-could-see-these-levels-before-a-possible-lift-off/
