Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- ETC rebounded from a crucial long-term support.
- Demand in the derivatives market was muted.
Ethereum Classic [ETC] rebounded from critical long-term support of $14.7 – $16.2 (cyan). The support zone has led to three consecutive price recoveries. But the recent recovery could face significant headwinds.
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In the meantime, Bitcoin’s [BTC] recovery was blocked at $26.8k and could ease to $26k before attempting another rebound.
ETC’s recovery hurdles
Source: ETC/USDT on TradingView
As illustrated by the above daily chart, the support zone, cyan, led to a recovery in January, March, and June. So, it’s a crucial long-term support that has seen massive demand whenever price action retested it.
However, the expected fourth recovery could be delayed and derailed by obstacles. The CMF was above the zero threshold, meaning that capital inflows were substantive.
But the RSI hadn’t crossed the 50-median mark, demonstrating improved but not-so-strong buying pressure as of the time of writing.
The first overhead hurdle for ETC bulls is the price imbalance and FVG (fair value gap) of $16.7 – $17.4 (white). In addition, there exists a previous support-cum-resistance zone of $17.8 – $18.6 (red) above the FVG.
So, the recovery towards the $20 psychological level contains key hurdles that could derail bulls.
Muted demand in the futures market
Source: Coinalyze
The demand for ETC was dismal in the futures market, as the Open Interest (OI) indicated. The OI measures opened contracts, thus capturing demand, liquidity, and overall market sentiment.
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Notably, the metric has registered a solid bounce after dropping in mid-August.
Besides, funding rates wavered as CVD (Cumulative Volume Delta) descended gently, further confirming muted demand and a lack of bulls’ edge in the market. Therefore, recovery could face challenges.