What level should short-term investors expect when ETC hits range tops? -CWJ | Crypto World Journal | Blockchain Nation
ETC’s range highs have been tested but a breakout has not been confirmed at press time. The market structure remained bullish.
Bitcoin [BTC] traded at $24.6k and faced strong resistance at $25.2k. Both a breakout and consolidation below bitcoin resistance are likely to present many altcoins with a bullish scenario. Classic Ethereum [ETC] is also a coin that could rise if sentiment remains bullish.
From a price perspective, however, ETC has recovered a large portion of last week’s gains. This was because the $24 area provided a strong resistance for the past month.
Highs of a one-month range retested
Since mid-January, Ethereum Classic has been trading in a range between $20 and $24, with the midpoint at $22. The price has maintained all three levels over the past few weeks. Recently, ETC traded at $23.5, near the highs of the $24 range.
The RSI was at 61 and has been climbing higher for the past few days to show increasingly bullish momentum. Lower timeframes like an hour also showed a strong bull market structure. Therefore momentum and structure continued to favor buyers. OBV also trended higher to show that buying pressure was constant and demand was there.
However, from a risk-reward perspective, buying ETC at $23.5 was not feasible. A breakout of the H4 market structure would occur on a drop below $22, the mid-level. On the other hand, short sellers can wait for an opportunity as $24 represents a significant level of resistance.
Analysis of the 1 hour and 30 minute time frame charts showed that the momentum was neutral. A move below $22.76 would break the structure of the market and turn bearish. So, if ETC moves below $22.76 and then retests the $23-$24 area, short sellers could look for open positions targeting $20 support. Its stop loss can be placed near $24.25.
To the downside, a clean break above $24.5 and a retest of $24 for support could offer a buying opportunity.
Open interest showed that bullish dominance has not waned
The one-hour chart shows increasing open interest along with the price. This was a strong indication of bullish sentiment in the futures market. The financing ratio was also positive. Therefore, long positions were in the majority.
Along with the price action, the conclusion was that further increases were likely. However, buyers should brace themselves for a sharp recession. If a move below $22.76 is completed, short sellers on lower time frames could attempt to enter a trade.
From Audy Castaneda
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