Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
ETC was in a neutral market structure.
Sentiment was negative, while the Funding Rate remained positive.
Ethereum classic [ETC] faced critical resistance around $23. Attempts to advance further failed, leading to a price correction that found steady support at $20.35.
At the time of writing, ETC was trading at $20.62 and flashed red after mild bullish momentum was dampened as Bitcoin [BTC] struggled to reclaim the $21K zone. ETC could retest this support if BTC secures the $20,000 support.
Read Ethereum classic [ETC] Price prediction 2023-24
The Green Support Zone: Can ETC Test It Again?
On the 12-hour chart, the Relative Strength Index (RSI) pulled back from overbought territory, only to experience rejection just below the mid-range. At the time of writing, the RSI was at 49.94, indicating a neutral position.
However, the Chaikin Money Flow (CMF) stood at -0.01 after retreating from the negative side. It was facing rejection at the zero level at the time of writing, indicating that the bullish momentum was not strong enough to confirm a trend change. This could imply a further weakening of the ETC market.
Therefore, ETC bears could gain more leverage and lower prices to retest the $20.35 level or slide into the $19-$20 green support zone.
Alternatively, ETC bulls could come in and push ETC towards the $23 critical resistance, especially if BTC surges above $21K. But such an uptick will invalidate the bearish bias described above. Nevertheless, bulls must overcome the $21.15 and $21.80 hurdles to reach the upper resistance target.
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Therefore, investors should follow the price action of CMF and BTC. If CMF breaks above the midpoint, it will signal confirmation of trend change and could boost uptrend momentum. Similarly, a bullish BTC will prompt CMF to cross over to the upside and confirm a change in trend.
ETC’s funding rate was positive, but sentiment and volume were down
According to Santiment, ETC’s funding rate has been relatively positive since Jan. 9. This shows that demand for ETC has remained unchanged since January 9, despite the recent price drop. More demand could raise ETC prices.
However, the fall in prices led to a negative weighted sentiment, signaling a bearish outlook from investors. In addition, ETC trading volume fell slightly and could undermine immediate uptrend momentum. As such, it could force ETC to retest the immediate support level.
However, a bullish BTC could increase trading volumes and invalidate the bearish forecast. Therefore, investors should be careful and monitor BTC performance before making any decisions.
This post Ethereum Classic: Recovery is in limbo, but this is where traders can be hopeful
was published first on https://ambcrypto.com/ethereum-classic-recovery-is-in-limbo-but-this-is-where-traders-can-be-hopeful/