Miami, Florida – Ethereum Classic (ETC) experienced a bullish breakout above the $29-resistance level on May 20. The excitement stemmed from the approval of spot Ethereum (ETH) exchange-traded funds (ETFs) and the network’s fourth halving on May 31. However, amidst recent volatility around the $32-level, ETC faced an 8% drop in just five days, raising questions about its next price movement.
For ETC bulls, the $29.1-level had been a significant resistance point since April 13. Despite this, they managed to overpower the bears on May 20. The On-Balance Volume (OBV) had been on the rise for a month leading up to this breakthrough, signaling a changing tide in the market sentiment. The momentum that followed was also influenced by the positive market sentiment around Ethereum, further boosting ETC’s performance.
After retesting the $29 resistance-turned-support level, ETC is expected to respond positively. However, there may be some short-term volatility in the market. Looking back at ETC’s early 2024 rally, the retracement in March and April did not drop below the 78.6% level at $22.5. Currently, the support sits at the 50% level at $29, indicating a potential move towards the high of $39.7 in the coming weeks.
A liquidity pocket below the $29 level acts as a magnetic zone for attracting prices. The liquidation levels heatmap from the past month shows a concentration of short liquidations in the $28.4-$29 zone. This suggests that a move towards $28 could create an opportunity for traders to buy before the next rally, capturing the liquidity in that area.
Traders should keep an eye on potential opportunities for a bounce around the $29-level, which could follow a dip to $28.4. By understanding the market dynamics and liquidity trends, traders can make informed decisions about when to enter or exit positions in ETC. As always, it’s essential to conduct thorough research and consider all factors before making any financial decisions.