Can Ethereum Classic’s [ETC] breakout trigger a rally or is it a bull trap

Disclaimer: The knowledge introduced doesn’t represent monetary, funding, buying and selling, or different forms of recommendation and is solely the opinion of the author.

International inventory market indices have been in a freefall over the previous two weeks. Bitcoin has additionally seen extreme losses over the identical time interval, measuring near a 35% drop. Given this backdrop, the altcoin market has additionally quickly shed worth. Ethereum Classic noticed a near-term bullish market construction break. But, this is able to possible not be sufficient to reverse the robust downtrend for the altcoin.

ETC- 4-Hour Chart

Supply: ETC/USDT on TradingView

On the H4 chart, it may be seen that the worth has set a collection of decrease highs since late Might. What just isn’t proven on the charts is that this downtrend stretches again to early April.

On the time of writing, there have been two zones of nonetheless resistance for ETC. The higher one was $18, and the decrease one at $14.8, each demarcated by purple bins. Furthermore, the 38.2% Fibonacci retracement stage added confluence to the $18 resistance zone.

ETC broke previous the $15.3 stage previously couple of days of buying and selling. This flipped the near-term market construction to bullish. The $13.89 assist additionally seemed to have been defended.

But, the upper timeframe bias stays strongly bearish. Due to this fact, a shorting alternative may quickly current itself.

ETC- 1 Hour Chart

Supply: ETC/USDT on TradingView

The H1 chart highlighted the bullish construction flip, however the $16.15 stage has not but been crushed. In truth, the sweep of this stage the day prior to this earlier than a transfer decrease advised that the pattern was firmly bearish.

Therefore, Your complete area from $14.6 to $16.1 can be utilized to enter a brief place. Bearish divergence on a timeframe larger than the H1 may supply a extra exact entry.

Supply: ETC/USDT on TradingView

The RSI on the hourly was preventing with the impartial 50 mark. Even when the hourly RSI climbs larger, it will not recommend a pattern reversal. The OBV noticed a spike larger on the day prior to this of buying and selling, whereas the CMF climbed to -0.04.

Taken collectively, it advised the presence of some shopping for strain. But, it wasn’t overwhelming strain, and won’t imply a pattern reversal to the bullish aspect.

Conclusion

The upper timeframe bias stays bearish, regardless of the bullish break on the decrease timeframes. The $16.15 stage stays unbroken, and the $14.8 can be a zone of resistance.

Due to this fact, a brief place will be scaled into between the $14.8 and $16.1 ranges, with a stop-loss simply above $16.3. To the south, the 23.6% Fibonacci extension stage at $10.13 could possibly be a bearish goal.