Ethereum Classic Price Just Crossed a Key Resistance. Still a Buy?
Ethereum Classic price rose above an important resistance as cryptocurrency prices staged a cautious comeback. ETC rose to a high of $16, which was the highest point since June 28th of this year. It has risen by over 28% from its lowest level this year. This price action is in line with that of other cryptocurrencies like Bitcoin, Ethereum, and Cardano.
Why is ETC rebounding?
The main reason Ethereum Classic price is bouncing back is mostly due to the ongoing correlation between cryptocurrencies and American equities. The Dow Jones, Russel 2000, and Nasdaq 100 indices have jumped in the past few consecutive days even as recession risks remain.
Recession risks are showing in several areas like the bond and commodities market. For example, the price of copper, which is usually seen as a barometer for the world economy, has crashed to the lowest level in more than a year. The same trend has happened in other commodities like crude oil and lumber.
Stocks have also risen as investors continue pricing in a situation where the Federal Reserve will start slamming its brakes on rate hikes. While the bank is expected to keep hiking interest rates, there is a possibility that it will start signalling the end of the hiking cycle in the next few meetings.
Therefore, Ethereum Classic price is rising not because of any fundamental change or new news but because of the ongoing correlation between stocks and cryptocurrencies.
Ethereum Classic price prediction
In my last ETC price forecast, I warned that the coin was ripe for a 33% dive to $10. That analysis was partly accurate, although the coin didn’t fall to $10. Instead, it moved from $18 to about $14.10 instead.
The 4H chart shows that the ETC price formed a strong bottom at the support at $14. The coin has made a strong comeback and managed to move above the resistance at 15.51. It has risen above the 25-day and 50-day moving averages, while the Relative Strength Index (RSI) has moved above the overbought level.
Therefore, Ethereum Classic will likely continue rising as bulls target the June 26th high of $17.95. On the flip side, a drop below the support at $15.51 will invalidate the bullish view.