Ethereum Classic [ETC] has just concluded the most bullish week of the past three months. It managed to rally 120% from $12.47, the lowest price point during the 2022 bear market.
The alt is now showing signs of a possible retracement, which is normal given profit taking after such a massive rally.
Well, ETC’s impressive rally prompted a recovery above the 50-day moving average, briefly pushing above the 200-day moving average.
Even more interestingly, ETC bulls managed to bounce back above the cryptocurrency’s lowest levels in January.
Notably, not many cryptocurrencies managed to recover above their January lows during the latest bullish uptick.
ETC traded at $26.20 on July 24 after falling slightly from its recent high of $28.19.
This price level is within the 0.382 Fibonacci retracement level.
The slight retracement and increased friction near the Fibonacci line is a sign of increased selling pressure.
There are also some signs that a bigger retracement is coming. For example, the price managed to reach a higher local high while the RSI fell.
This indicates trend weakness hence the bullish uptick has already come to an end. The outflows recorded by the MFI reflect profit taking at the top of the trend.
Bearish expectations are further supported by whale address outflows.
The total supply of whales registered a significant outflow since July 21.
This result means that ETC is likely to experience more selling pressure in the coming days.
This is also supported by a decline in development activity.
Can the bulls keep up the fight?
ETC’s Binance funding grade suggests there is still healthy demand from the derivatives market.
This may reflect the current outcome in the spot market, but the bears will eventually overpower the bulls if the whales don’t keep up.
Biological demand is currently not in favor of ETC bulls. Even total NFT trading volumes have dropped significantly in the past seven days.
The only way ETC can maintain bullish momentum without a substantial retracement is if the market continues to rise.
Otherwise, taking profits will inevitably lead to a sell-off before it can regain its advantage.
It remains to be seen whether the upcoming merger of Ethereum will affect the price action of Ethereum Classic.
This post Ethereum Classic: Reasons Why You Should Consider Shorting ETC Now
was published first on https://ambcrypto.com/ethereum-classic-reasons-why-you-can-consider-shorting-etc-now/