After breaching south from a parallel channel, Ethereum Classic (ETC) appeared poised for further losses. If no resistance is given at $48.2, a closure below the daily 20-SMA may prolong the sell-off by another 15%. The prognosis was bolstered by a low RSI reading and a negative DMI that showed no indications of changing course.
Bears pierced below the junction of the 4-hour 200-SMA and the pattern’s bottom trendline, causing ETC to break out of its parallel channel.
In the face of low volumes, a flashback provided more entry chances for those eager to short ETC’s breakdown. Bears needed to close below ETC’s defenses at $51.4, as well as the daily 20-SMA, to trigger another 7% drop (not shown).
Ethereum Classic Price Chart – Source: Tradingview
Buyers might retaliate at the swing low of $48.2 on September 7th, laying the groundwork for a bullish turnaround. However, if sellers cut below $48.2, ETC would be vulnerable to another 8% drop.
ETC’s 4-hour RSI is now trading under a bearish falling triangle, indicating further weakness in the days ahead. Those expecting a false breakthrough and a return to the rising channel were disappointed.
Furthermore, based on an ADX reading of 33, the negative stance of the Directional Movement Index was predicted to strengthen. The MACD, on the other hand, provided some relief after edging closer to a bullish crossing.
To flush away market pessimism, the index would need to move firmly above its mid-line. Once bears break through the daily 20-SMA, an abrupt 7% drop is expected. To keep ETC from bleeding more on the chart, buyers would have to launch a recovery at the $48.2-support level.
Traders can enter short positions whenever ETC closes below $51.4 and exit their bets around the $48 mark, despite the fact that two good entry levels were bypassed.