Ethereum Classic at $37.5 yet again- where is the battle headed next

Dis­claimer: The find­ings of the fol­low­ing analy­sis are the sole opin­ions of the writer and should not be con­sid­ered invest­ment advice.

Ethereum Clas­sic [ETC] has post­ed size­able gains in the past two weeks as the bulls refused to let the price slide beneath the $30 mark. They were able to dri­ve a ral­ly as high as $42 before fac­ing rejection.

News of the Merge could also have had an effect as min­ers shift­ed to the ETC which result­ed in a rise in the hash rate for the PoW coin. This rate has grown since mid-August, but the price has not been in lock­step with these devel­op­ments. Bitcoin’s [BTC] plunge the pre­vi­ous day did not help the bulls either.

ETC- 1‑Day Chart

Source: ETC/USDT on TradingView

The price charts showed two things. One, ETC was still with­in a long-term down­trend. Despite the strong gains in July and August, the price was unable to break pre­vi­ous highs, stretch­ing back all the way to Sep­tem­ber 2021.

There have been size­able ral­lies in between these down­ward moves. Since Novem­ber last year, ETC has post­ed swing highs at $64, $52, and $46, each of which was low­er than the previous.

The oth­er thing the charts showed was that ETC was in an impor­tant zone of sup­ply and demand. The $35-$37 area has act­ed as resis­tance since the begin­ning of 2022. The $50 has also been a high­er time­frame area of significance.

A set of Fibonac­ci retrace­ment lev­els (yel­low) were plot­ted based on ETC’s move down from $52.66 to $12.47. It showed the 78.6% and 61.8% retrace­ment lev­els were at $44.06 and $37.31. More­over, these lev­els have also been respect­ed by the price in recent weeks of trading.

Rationale

Source: ETC/USDT on TradingView

The indi­ca­tors showed that some bull­ish­ness still remained behind Ethereum Clas­sic. The Rel­a­tive Strength Index (RSI) man­aged to stay above neu­tral 50 despite the volatil­i­ty in the past two weeks. This sug­gest­ed that momen­tum might con­tin­ue to favor the bulls.

The On-Bal­ance Vol­ume (OBV), on the oth­er hand, was rather flat. It showed buy­ing and sell­ing vol­ume across the past month to be rough­ly equal and hint­ed at the lack of dom­i­nance from either camp.

In agree­ment with the find­ing, the Chaikin Mon­ey Flow (CMF) also trod water in neu­tral ter­ri­to­ry. It has even dipped below ‑0.05 to out­line sig­nif­i­cant cap­i­tal flow out of the market.

On the oth­er hand, the Direc­tion­al Move­ment Index (DMI) showed that Sep­tem­ber saw a strong uptrend for ETC.

Conclusion

The indi­ca­tors showed some bull­ish momen­tum but a lack of steady, strong demand from buy­ers. The price action high­light­ed the $37 and $50 regions to be of par­tic­u­lar impor­tance, with the Fibonac­ci retrace­ment expect­ed to act as sup­port and resis­tance as well.

Bit­coin would like­ly heav­i­ly influ­ence ETC in the com­ing weeks. Bit­coin, in turn, would be influ­enced by the glob­al mar­kets as well. The inabil­i­ty to rein in infla­tion in the U.S. could cat­alyze a move down­ward over the next month.