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- The imbalance on the chart is likely to be partially filled before the next price move down.
- A break in structure with a move above $15.55 could hint at uncertain short-term conditions.
In a recent report, the lack of volatility behind Ethereum Classic was highlighted as a sign that a large move was imminent. At that time the direction was uncertain, but Bitcoin’s failure to reclaim $27k sealed the fate of ETC bulls.
Realistic or not, here’s ETC’s market cap in BTC’s terms
The market structure and the trend were wholly on the side of the sellers. A reversal was unlikely, and another move down to a Fibonacci extension level was expected.
The sharp drop below $16.5 meant sentiment was extremely bearish
Source: ETC/USDT on TradingView
The market structure of Ethereum Classic became bearish in the latter half of April, when prices fell below the $20.23 mark. Since then, the asset has posted a series of lower highs and lower lows on the chart.
The second half of May saw ETC enter a phase of price contraction. This could have been taken as a phase of accumulation, if only the OBV was in an uptrend. It was the opposite, and the sentiment in the market was also in favor of the sellers.
The uncertainty in the crypto sphere and Bitcoin’s plunge below $26k saw Ethereum Classic dive by 26.6% from $17.18 to $12.61 on 10 June. A set of Fibonacci retracement levels (pale yellow) was plotted based on this move. It showed the 50% and 61.8% levels in a region of imbalance (white) that the quick dump had left behind.
Such an imbalance was seen at the $17.5 mark and is highlighted in white. It was partially filled before the price continued to trend downward. Therefore, a similar scenario could unfold in the coming days and presents a shorting opportunity targeting the 23.6% extension level. This idea would be invalidated if ETC pushes upward past $15.5 and $16.2 as that would signal bullish intent (but could also be a liquidity hunt).
The Open Interest chart posted a weak bounce as the bulls clawed their way above $15
Source: Coinalyze
On 14 and 15 June, Ethereum Classic bulls embarked on the toilsome task of driving prices higher. The spot CVD reflected a severe lack of demand, and the bounce was not accompanied by significant buying pressure.
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During this minor bounce the OI increased by close to $5 million but this value paled in comparison to the losses the OI has seen over the past week. The funding rate was positive but overall, the sentiment was bearish and buyers had little conviction.