The price of ETC is up 28% in the past week. However, the price charts showed that the alt is overbought.
Ethereum classic [ETC] had a strong week, with prices up 28.60%, according to data from CoinMarketCap. This made it one of the best performing cryptocurrencies, along with Lido [LDO]which saw a 55% price increase, and Solana [SOL]which had a 35% rally over the same period.
Read Ethereum Classics [ETC] Price forecast 2023-2024
A retracement in sight for Ethereum Classic?
A review of ETC’s performance on a daily chart revealed that an approaching price could be in sight as the asset was trading at overbought highs at the time of writing.
First, the Money Flow Index (MFI) was at 88 at the time of writing. On the same path, ETC’s Relative Strength Index (RSI) was pegged at 63.79 in an upward trend. These positions indicated that ETC was overbought.
At this point, buyer exhaustion is common as new demand for the asset falls, leaving buyers in the market unable to sustain a further rally. This often results in bears regaining control and initiating a price downside.
Further, a review of ETC’s Bollinger Bands (BB) found that the altcoin was very volatile at the time of writing. Although the price of ETC broke above the upper band of the indicator, indicating a continuation of the bullish trend, the width between the upper and lower bands widened. This suggested high volatility.
When the price of a crypto asset is highly volatile, it is prone to significant price swings in a short period of time. This can make it riskier to hold or trade the asset.
Interestingly, a look at ETC’s Average Directional Index (ADX) (yellow) showed that the strength of the buyers was a rock-hard force that sellers cannot possibly reverse in the short term.
This is because it was positioned above the Plus Directional Indicator (+DI) (green) and the Minus Directional Indicator (-DI) (red), which together form the Directional Movement Index (DMI).
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At the time of writing, the buyers’ strength at 31.48 was firmly positioned above the sellers at 1:00 PM.
Caution is advised
Despite ETC’s price gains over the past week, weighted sentiment has been negative since the start of the year. This meant that, despite the continued growth in ETC value since the start of the year, investors still held negative beliefs. A negatively weighted sentiment often precedes a price drop.
This post Ethereum classic [ETC] sends warning signals when the price rises more than 25%
was published first on https://ambcrypto.com/ethereum-classic-etc-sends-cautionary-signals-as-price-grows-by-over-25/