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Ethereum Classic (ETC) Faces Resistance at $15.60: Traders Eye Shorting Opportunities

Ethereum Classic (ETC) has been grappling with persistent price rejections near the $15.60 mark, leaving traders cautious about taking long positions, especially considering the liquidation data trends. In this analysis, we delve into the current state of ETC’s price action and explore potential trading opportunities in this challenging environment.

Ethereum Classic has remained trapped within a relatively tight price consolidation range throughout September, oscillating between $15.20 and $12.60. Traders eyeing profit potential closely monitor the range’s extremes, ready to capitalize if the range extends further.

Meanwhile, Bitcoin (BTC) has struggled, encountering price rejection at $26.4k and retracing to the range’s lower boundary at $25.7k.

The fate of ETC appears closely tied to Bitcoin’s movements. If BTC successfully defends the range’s lower limit and reverses recent losses, ETC could potentially edge higher, aiming to overcome the stubborn $15.60 resistance. However, this level has repeatedly posed a challenge, potentially creating a shortage of opportunities should history repeat itself.

A detailed examination of the 4-hour chart reveals ETC’s oscillation between $15.60 and $15.20 in the initial week of September. The persistent resistance at $15.60 coincided with an invalidated bullish order block (OB) ranging from $15.58 to $16.00 (marked in red) on the 12-hour chart, formed on August 29th.

Furthermore, the 4-hour 50-EMA (Exponential Moving Average) at $15.5 positioned itself below the invalidated bullish OB, suggesting that the area above $15.5 could serve as a robust bearish zone. Consequently, a potential rebound at the range’s lower limit of $15.20 may encounter resistance again at the upper range boundary.

Traders contemplating shorting opportunities could consider entering a position at $15.55, with a take-profit target set at $15.20. However, it’s essential to remain vigilant, as a 4-hour candlestick session closing above $15.70 and a subsequent move above $16.0 would invalidate this shorting idea.

Meanwhile, technical indicators hint at a challenging environment. The Chaikin Money Flow (CMF) retreated southward, breaching the zero level, signifying a decrease in capital inflows. Additionally, the Relative Strength Index (RSI) registered a downtick, underscoring heightened selling pressure.

Sellers in the ETC market may want to exercise patience and wait for a potential reversal and rejection at the range’s upper boundary before making any significant moves.

On the liquidation front, ETC has witnessed a surge in long liquidations on the 4-hour timeframe, with over $160k worth of long positions being liquidated compared to minimal shorts, emphasizing the prevailing bearish sentiment.

The broader crypto market recorded $25 million in total liquidations in the 4 hours following this analysis. Rekt longs accounted for over $23 million, representing more than 75% of all liquidations, reinforcing a short-term bearish bias that traders should approach cautiously.

 

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