Ethereum Classic (ETC) has retreated into a bearish channel (yellow) since its November highs. After that, the bulls started a breakout rally as they jumped above some critical price points.
After the recent buying rally, ETC has entered a low volatile phase for the past ten days. With the bears keen to defend the $49 mark, the alt could see a sluggish phase before taking a trend move. Any drop below the 20 EMA (red) could hurt the bullish strength. At the time of writing, ETC was trading at $46.32.
ETC Daily Chart
The down-channel (yellow) retracement saw a drop of nearly 66.9% as the sell-off stopped at the $22-base. Interestingly, ETC posted an ROI of over 119% from its nine-month low on Jan. 22, when it jumped above the 20/50/200 EMAs. But it struggled to topple the $49 mark that coincided with the 10-week trendline resistance.
After breaking through its long-term down channel, the alt saw a short-lived rally that tested the down channel’s upper trendline. Then the bulls steered in their favor as they marked multiple bullish engulfed candlesticks.
With the 20 EMA crossing the 200 EMA (green), the bulls made their intentions clear about the long-term trends. So losing the $45 support could propel a test of the 20 EMA. Furthermore, a sustained pullback could reverse out of the USD 38-$40 zone. If the 50 EMA crosses the 200 EMA, the alt would aim to challenge its trendline resistance near the $53.
After falling out of overbought territory, the RSI now wanted to test the 59 support. A drop below that level would open gates for the price to test the 20 EMA.
Furthermore, the MACD lines undertook a bearish crossover as the histogram plunged below the zero line. This reading indicated a slightly diminishing buying advantage. But the OBV saw higher declines last week. This allowed ETC to test its immediate resistance before a possible fallout.
Given the readings on the MACD, the buyers lost their lead. So a possible test of the 20 EMA before sustained bullish moves seemed likely.
In addition, broader market sentiment and supply chain developments would play a vital role in influencing future movements.
This post What should ETC bears consider before going short?
was published first on https://ambcrypto.com/what-etc-bears-need-to-keep-in-mind-before-going-short/