As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed numerous market cycles and learned to read between the lines of price movements and technical indicators. The current state of Ethereum Classic (ETC) is indeed challenging, but it’s not unfamiliar territory for those who have been through the crypto winter before.
The cryptocurrency sector is currently grappling with major difficulties after the turbulence seen in July. Specifically, Ethereum Classic’s value has been affected by these adverse conditions, experiencing a decrease of 5.4% over the last seven days, and an extra 2% drop within the past 24 hours. As a result, it was trading at $21.34 during regular US trading hours on Tuesday afternoon.
ETC Futures Liquidations Surge
On Thursday and Friday, the Ethereum Classic futures market experienced a surge in liquidations due to increased selling pressure from traders. According to data from Coinglass, long traders suffered significant losses, with over $800,000 worth of positions being liquidated in a 24-hour period. Meanwhile, around $50,000 in short positions were also liquidated, weakening the resistance that had been building up and causing the Ethereum Classic price to drop and retest the $20 support level.
Approximately $266 million was lost by futures traders collectively due to liquidations. Long position traders accounted for around $197 million of these losses, while short position traders faced roughly $67.5 million in losses.
In the last day alone, an astounding 92,214 futures trading accounts were closed out or “liquidated”. The biggest single liquidation took place on the OKX platform, worth approximately $3.9 million in Ethereum-U.S. Dollar-SWAP.
Will Ethereum Classic Price Crash Or Bounce Back?
As a researcher studying the cryptocurrency market, I find myself analyzing the delicate state of Ethereum Classic’s price. To bolster its chances for a recovery this weekend, it is crucial that the support at $20 holds firm. Unfortunately, at present, the digital asset lies beneath all three bull market indicators—the 20-day, 50-day, and 200-day Exponential Moving Averages (EMAs). This positioning seems to favor sellers, potentially putting pressure on Ethereum Classic’s price.
As the moving averages gradually dropped, a pair of “death crosses” emerged, lending weight to the descending trend. In other words, these crosses suggest that certain traders might prolong their short positions on ETC, hoping to undermine the $20 price level.
According to an earlier prediction about the price of ETC, dropping below the $20 support could pose a risk for the Ethereum Classic chain. This might trigger liquidity sweeps at prices around $19.5 and $18.5. Furthermore, the Relative Strength Index (RSI) indicates a bearish trend, which may persuade traders to sell short ETC due to a bearish divergence pattern.
There’s a hint of optimism regarding the Ethereum Classic (ETC) price. On the four-hour chart, a descending triangle (or falling wedge) pattern has emerged, which could signal an upcoming 9% increase, potentially pushing the price up to around $23.
As trading activity results in a sequence where prices reach progressively lower peaks but form successively higher troughs, this pattern is known as a rising trough-falling peak formation, or simply a falling wedge. Many traders wait for the wedge to break out before entering long positions, aiming to benefit from an anticipated price surge that could be roughly equivalent to the distance between the high and low points of the wedge.
In simple terms, placing a stop-loss order beneath the wedge shape is essential for effective risk control. Furthermore, setting your profit target at a 9% increase from the range between the initial highest price and lowest price (the first swing high and low), measured starting from the breakout point, can be beneficial on the upward trend.
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2024-08-02 18:34