Ethereum Classic Tests Critical Support at $11.77 as ADX Signals Trend Exhaustion
Market Structure Shifts Lower
- ETC dropped by 14.25% last week, nullifying all gains from November
- The ADX has increased to 34.87 which confirms a strong bearish trend
- There are multiple supports ranging from $11.27 to $11.77 that are make or break areas
Over the past week, Ethereum Classic has experienced a regrettable decline. It has lost 14.25% and dropped to the crucial psychological level of $11.77, as general altcoin sentiment turned negative after Vitalik Buterin cautioned that off-chain validators are vulnerable. Looking at the monthly performance, things look even worse. ETC is down by 39.84%, which means that it has lost in one month what it gained in the last three. The key issue for traders now is: will the bulls manage to protect the extremely thin support area from $11.27 to $11.77, or will the bears force the Cryptocurrency to single-digit lows?
| Metric | Value |
|---|---|
| Asset | ETHEREUM CLASSIC (ETC) |
| Current Price | $11.77 |
| Weekly Performance | -2.45% |
| Monthly Performance | -14.25% |
| RSI (Relative Strength Index) | 39.0 |
| ADX (Average Directional Index) | 34.9 |
| MACD (MACD Level) | -0.43 |
| CCI (Commodity Channel Index, 20-period) | -90.82 |
RSI at 39.02 Approaches Oversold Territory After Month-Long Slide
With gold trading circa $24 off its monthly 20D-EMA and retesting upper 1698-1702 support, expect a choppy directional struggle until the winner of that tug of war sets short term direction. A bearish EMA-cycle signal is actively in progress while RSI on multiple timeframes is sub 40. A 30-minute close sub 1698 shifts the immediate-term technicals back to bearish with support targets at the trendline from the March low to 1693.60, then 1685.64. If 1693.60 breaks & additional bids fail 1675.80 returns to focus.
What is interesting to note is the behaviour of RSI in the recent waterfall- it kept on declining rather than plummeting which usually implies that the selling was more orderly and not panic liquidations. For swing traders though this decline to 39 the RSI means that we wait for a confirmed oversold bounce setup rather than trying to catch this falling knife. The weekly RSI at 32.75 confirms the intermediate-term bearish bias but again is just above typical reversal zones.
ADX at 34.87 Confirms Mature Downtrend Seeking Exhaustion
The current leg lower led to a slight higher low on the daily RSI. This will be the first inkling of a waning selling drive amidst these lows._daily_rsi sibling held firm near 30, indicating most daily lifts struggled to overcome this resistance level – often a telling sign of the amount of strength behind a trend.
Beyond the ADX number, it’s interesting to look at momentum oscillators. These have embedded to deeply negative levels on all time frames now, but are beginning to flatten out rather than accelerate lower. This is typical in the late stages of a price move… strong trend (high ADX) and decelerating momentum. Day traders should be prepared for volatility as this mature trend looks for the point of exhaustion. Whipsaw is likely as bears defend overhead resistance and bulls search for a final bottom.
20-Day EMA at $12.29 Becomes First Resistance After Support Flip
The 5-day ($12.30) EMA is beginning to approach and likely cross beneath the 10-day EMA, further solidifying the bearish stance and likely leading to a full “death cross” within the coming week. This technical frame warns us to remain patient in adding to long positions, and to prepare for additional downside positioning given the price trajectory.
The price structure looks quite bearish, with the 20-day EMA driving hard lower and getting ready to cross the 200-day long-term EMA lower, a terrible omen for any asset and indicative of tremendous relative weakness. Bullish speculators should wait for at least a test of the December 2018 lows, with a likely breakdown to $10.00 shortly thereafter. The most optimistic short-term scenario doesn’t take ETC much higher than $14.85, allowing you to establish a low-risk short entry near current levels.
Support Stacks Between $11.27 and $8.83 as Bears Target Monthly S2
It will be difficult for the price to recover and bounce back. The first obstacle is at $12.87 and there are strong sellers there who have pushed the price down recently. If somehow the price manages to break through that barrier, then the next obstacle will be the $15 mark, which is in close proximity to the monthly R1 level of $15.03. The resistance at the December high of almost $14.35 will also come into play. So, between $15 and the current level, bears have established multiple resistance points.
The support structure looks better with the monthly S1 at $11.27 acting as the first test beneath the current price. This level is supported by the fact that this level has been tested on six occasions since June and each time there was a reaction in the price to the upside, but each reaction weakened. The monthly S2 is way down at $8.83, but barring any doomsday scenario, the stock’s downside should be cushioned by the 52-week low at $10.98.
The market is showing the classic bear market pattern of each bounce failing at a lower high, while levels of support are increasingly tested. The compression of current price at $11.77 and key support at $11.27 is creating a coiled spring, where a break either way can lead to an accelerated move. With Kaspa’s growing throughput highlighting Ethereum Classic’s technological weakness, fundamental headwinds are adding to the technical pressure. The defense of support will become even more critical.
Bears Dominate Unless Bulls Reclaim $12.29 With Conviction
Buyers need to push the price above the 20-day EMA at $12.29. If the price sustains above the 20-day EMA, the bulls will make one more attempt to push the price above the $12.87 monthly pivot level. If they succeed in doing that, the ETC/USD pair could start a relief rally. The recovery is likely to face stiff resistance at the 50-day SMA and then at $14.00. If the price turns down from this resistance, the bears will try to sink the price below $10.70. If they manage to do that, the decline could extend to $9.50. This negative view will be invalidated if the pair rises above $12.87 and the 50-day SMA.
If the support level at $11.27 is broken with high volume, it would likely hit the stop-loss orders and push the price down even further to the monthly S2 support level at $8.83. This would lead to trapping investors who recently bought the stock at low prices while causing a rapid decline as there are no major support levels between $9 and $11. The ADX reading of over 34 indicates that sellers still have enough power to drive the price down further if the support level is breached.
Based on how the current picture is shaping up, coupled with the bearish long-term thesis, shorting the confirmation break of 10.50 in the next couple of weeks and giving our position time to breathe is the highest-probability, best risk/reward play we can find, at least until the amount of congestion starts limiting an area’s price volatility.
