ETC’s range highs were tested, but a breakout was not confirmed at press time. Market structure remained bullish.
Bitcoin [BTC] traded at $24.6k and faced stiff resistance at $25.2k. Both a breakout and consolidation below the Bitcoin resistance will likely present many altcoins with a bullish scenario. Classic Ethereum [ETC] is also a coin that could rise if sentiment remains bullish.
However, from a price perspective, it was possible for ETC to retrace a large part of the gains it made over the past week. This was because the $24 area has been strong resistance over the past month.
Highs of a Month-long Range Tested Once More
Since mid-January, Ethereum Classic has traded within a range between $20 and $24, with the midpoint at $22. The price has respected all three levels in recent weeks. Recently, ETC was trading at $23.5, near the highs of the $24 range.
The RSI was at 61, and has risen higher in recent days, to show increasing bullish momentum. Lower time frames like an hour also showed a strong bull market structure. Therefore, momentum and structure continued to favor buyers. OBV also showed an uptrend, to show that buying pressure was constant and demand was present.
However, from a risk-to-reward point of view, it was not feasible to buy ETC at $23.5. A breakout of the H4 market structure would occur on a drop below $22, the mid-range mark. On the other hand, with $24 being a significant level of resistance, short sellers can wait for an opportunity.
Analysis of the one-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 it bearish. Therefore, if ETC moved below $22.76 and then retested the $23-$24 area, short sellers may look for open positions targeting $20 support. Its stop loss can be set near $24.25.
On the other hand, a clean break beyond $24.5 and a retest of $24 for support may offer a buying opportunity.
Open Interest Showed Bullish Dominance Has Not Waned
The one-hour chart showed rising open interest along with price. This was a strong indication of the bullish sentiment in the futures market. In addition, the funding rate was also positive. Therefore, long positions were in the majority.
Taken together with the price movement, the conclusion was that more rises were likely. However, buyers should be prepared for a sharp recession. If a move below $22.76 materializes, short sellers on lower time frames may look to enter a trade.
By Audy Castaneda
