ETC formed a symmetrical triangular chart pattern and was in a bearish market structure.
A convincing breakout to the downside could find new support at $14.27.
A bullish breakout and intraday close above USD 20.28 would disprove this prediction.

Ethereum classic [ETC] was in a rally before the market crash in early November knocked it off track. Aside from November 23, which encountered significant resistance at $20.28, ETC has never seen a major rally.

At the time of writing, ETC was trading at USD 18.80 in mild bullish momentum that could fizzle out given the bearish outlook of technical indicators. Most importantly, ETC plotted a symmetrical triangle pattern that could lead to a downside breakout.

ETC Forms a Bearish Triangular Pattern: Are Bears Taking the Lead?

Source: ETC/USDT on TradingView

ETC price action since November 10 has formed an asymmetric triangle. ETC is likely to see a bearish breakout as the triangle pattern is in a bearish market structure.

Key technical indicators suggest that a downside breakout is also more likely. The Relative Strength Index (RSI) on the daily ETC chart is below the neutral level and on its way down. In addition, the RSI moved into the lower range, indicating that the sellers had a significant impact on the market.

In addition, the On Balance Volume (OBV) has reached lower and lower highs since August. This shows a steady decline in trading volume, undermining strong buying pressure. So sellers have a great opportunity in the market.

Thus, a bearish breakout of the triangle pattern is very possible. If the breakout succeeds, ETC could find new support targets at $18.02, $15.89, $14.27 and $14.05.

However, an intraday close above the $20.28 resistance would negate this forecast. Such a convincing bullish breakout could lead ETC to a new USD 24 resistance target in the coming days or weeks.

ETC saw a drop in open interest rates on major exchanges

Source: Coinglass

According to Coinglass, ETC saw a drop in open interest rates from August. On Binance alone, the money flowing into the ETC futures market fell from $250 million in August to around $50 million at the time of publication.

That’s a whopping 80% less money flowing into ETC futures. A similar trend can also be seen at other major exchanges.

Source: Coinglass

This shows that investor prospects for ETC futures have declined since the third quarter of 2022. It may therefore take some time for the sentiment to turn positive.

Interestingly, the sentiment in the derivatives market is also reflected in the spot market. Therefore, the current bearish sentiment for ETC could continue for some time. This will put downward pressure on the price of ETC.

However, should BTC regain the $17,000 mark and move higher, ETC could see an upside breakout and invalidate the above prediction.

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