Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- A retest at $21.79 of the overhead resistance was likely.
- A break below $19.95 will result in an invalidation.
After a rally of 12% on 6 January, Ethereum Classic [ETC] got into the $19.95 – $21.77 range. ETC trades in the above range from 7 January.
Read Ethereum Classic’s [ETC] Price Prediction 2023-24
ETC traded at $20.52 as of press time and could retest the upper limit boundary of $21.77 if demand kicks into action. CPI data will play a key role here.
The U.S. CPI is used commonly to gauge U.S. inflation rate and speculators were betting that it would continue to fall.
The upper range boundary at $21.77: Is a possible retest?
Source: ETC/USDT TradingView
The Relative Strength Index, (RSI), stayed in the overbought area for too long before moving sideways. This showed that although buying pressure has dropped slightly, bullish momentum is still very strong.
The Money Flow Index (MFI), which had been in the middle of the range, rebounded and showed that there was a significant distribution.
ETC bulls could therefore attempt to retest $21.77 overhead resistance and possibly go higher, primarily if BTC targets the $20K psychological mark.
A break below $19.55 support could invalidate the bullish outlook. This could lead to bears settling at $19.09 Fib or $18.76 100-period EMA.
ETC’s mining hashrate recorded an uptick while open interest declined
Source: Messari
According to Messari, ETC’s mining hash rates declined steadily from mid-December 2022 and bottomed out at the end of December. It then saw an increase, but it has not yet reached the mid-December levels.
Prices directly influence hashrate; a dramatic drop or an increase in it will result in price drops or rallies, depending on the market. ETC’s declining hashrate from mid-Decemeber correlated with ETC’s price decline.
As of press time, there was an increase in hashrate. This could negatively affect the ETC price if it continues.
Source: Coinglass
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On the other hand, ETC’s open interest (OI) rate declined further as the coin moved sideways. It shows that more money left the futures market, as ETC traders closed their positions or liquidated them as ETC traded in a range.
ETC could be headed for a trend reversal because of hidden OI/price divergence. However, BTC’s price action could give investors more clarity on the next movement.