Imagine if one could measure a cryptocurrency’s demand level by the strength of its bounceback. Ethereum Classic would have been worth looking at then, especially after its 260% rally from its 2022 lows. the question, however, is – Can it carry the same momentum in its next recovery phase?
Ethereum Classic’s press time price of $32.91 represented a 27% drawdown from its latest monthly top. This meant that it is still holding on to significant gains, when compared to its price action in June. The fact that ETC has only depreciated by a relatively small margin in the last 7 days might be a healthy sign of strength.
ETC’s latest downside resulted in a support retest near the 0.5 Fibonacci level. The bears, at press time, were experiencing friction near this level, thus confirming a slowdown of sell pressure within the $32-price range.
Source: TradingView
Although Ethereum Classic’s press time position looked like a healthy bounceback zone, there is a lack of clarity on the potential outcome. Its volume dropped significantly in the last 24 hours – A sign of a lack of investor excitement.
The volume observation can also be interpreted as inaction by investors due to uncertainty after the latest downside. This correlates with the increase in the percentage of stablecoin supply held by whales.
Source: Santiment
ETC whales have been cashing out as the price soared higher during its relief rally. In fact, there is still a fair probability of ETC crashing below its press time level.
Positive sentiments dropped substantially in the last 48 hours, while negative sentiments registered an uptick.
Source: Santiment
The observed sentiment change means the price action might lean more towards greater sell pressure on the charts.
Conclusion
ETC’s metrics highlighted a significant level of uncertainty as far as short-term price action is concerned. However, the crypto-market is subject to regular fluctuations and everything is still correlated. This means ETC is still under the spell of the overall market sentiment.
ETH is still a healthy crypto to trade, especially this month. Its trading volumes have increased healthily in the last few months. This is likely because it is riding on the Ethereum Merge hype.