Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Ethereum Classic (ETC) continued its retracement until its 11-month support around the $24 zone. Since then, the bulls have sparked a steady recovery in the charts.
With the 20 EMA and the Point of Control (POC, red) posing as barriers to the bulls, ETC appeared to be looking ahead to a squeeze phase before making a trend-committing move. The $26 support is critical for the bulls to hold on to avoid a fallout towards the $25 level.
As of going to press, ETC was trading at $26.47.
ETC 4 Hour Chart
After moving sideways in the better half of last year, ETC lost the vital $30 mark as the bears turned it into resistance. The alt lost more than 45% of its value (as of December 27) when it fell to a nine-month low on January 22.
ETC has made decent gains since the January lows and witnessed a bullish trendline support (white, dashed). Although it marked higher lows, the bears kept the highs in check. So compress ETC in a symmetrical triangular pattern. After the recent (yellow) breakout in the down channel, the bears quickly took over and held ETC below the EMA ribbons.
From here on, a confluence of multiple resistors makes the recovery path tricky. Any close above the trendline resistance (white) could trigger a $27 retest. If the current candlestick closes green, that would confirm a possible morning star candlestick pattern.
But with current momentum, ETC would likely continue its low volatility phase and test its trendline support. To turn the tide in their favor, the bulls need to find one more lock above the POC.
The RSI hovered below the midline, portraying a bearish bias. It has formed a descending triangle on its 4-hour chart for the past three days. This repeated the increase in sales influence. The CMF also moved south, confirming declining cash flows. Nevertheless, the ADX was in a downtrend revealing an extremely weak directional trend.
Traders/investors should now look for confirmation of the bullish morning star candlestick pattern. The POC would serve as an important area of value in the coming days. A likely close below this level would prompt ETC to retest its support before entering a highly volatile phase.
In addition, broader market sentiment and developments within the chain would play a crucial role in influencing future movements.
This post Ethereum Classic – This could be the answer to the ‘HODL or sell’ question
was published first on https://ambcrypto.com/ethereum-classic-this-may-be-the-answer-to-the-question-to-hodl-or-sell/