Disclaimer: The information presented does not constitute financial, investment, trading, or any other type of advice, but is merely the opinion of the writer.
The global stock market index has plummeted in the last two weeks. Bitcoin also suffered serious losses over the same period, measuring a drop of nearly 35%. Given this background, the altcoin market is also rapidly declining in value. Ethereum Classic has collapsed its bullish market structure in the short term. Still, this may not be enough to reverse the strong downtrend of altcoin.
ETC-4 hour chart
Source: TradingView ETC / USDT
On the H4 chart, we can see that the price has set a series of lows since late May. What is not shown on the chart is that this downtrend dates back to early April.
At the time of writing this, there were two zones that were still resistant to ETC. The top is $ 18 and the bottom is $ 14.8, both separated by a red box. In addition, the Fibonacci retracement level of 38.2% adds a confluence to the $ 18 resistance zone.
ETC has exceeded the $ 15.3 level in trading over the past few days. This turned the short-term market structure bullish. Support for $ 13.89 also seemed to be defended.
Still, the higher time frame bias remains very bearish. Therefore, short-circuit opportunities may appear soon.
ETC-1 hour chart
Source: TradingView ETC / USDT
The H1 chart highlighted a bullish structural reversal, but the $ 16.15 level has not yet been defeated. In fact, this level of sweep the day before the fall suggested that the trend was solidly bearish.
Therefore, you can use the entire area from $ 14.6 to $ 16.1 to enter the short position. A bearish divergence in a higher time frame than H1 may provide a more accurate entry.
Source: TradingView ETC / USDT
The hourly RSI was fighting at the Neutral 50 mark. The rise in the RSI per hour does not imply a reversal of the trend. While CMF rose to -0.04, OBV soared the day before trading.
In summary, it suggested the existence of buying pressure. Still, it’s not overwhelming pressure and may not mean a trend reversal to the bullish side.
Conclusion
Despite a bullish break in the lower timeframe, the higher timeframe bias remains bearish. The $ 16.15 level is uninterrupted and $ 14.8 is also a zone of resistance.
Therefore, the short position can be expanded from $ 14.8 to the level of $ 16.1 and the stop loss is slightly above $ 16.3. In the South, the $ 10.13 23.6% Fibonacci extension level could be a bearish target.
