Ethereum Traditional [ETC] bulls are already displaying indicators of momentum weak point, after dominating particularly within the second half of July.
The coin after peaking at barely above $45, retraced beneath $40. It’s now displaying indicators of extra draw back and right here’s why.
A powerful pullback was inevitable after the sturdy rally that Ethereum Traditional delivered in direction of the tip of July.
It manifested within the promoting stress that occurred firstly of the month. This pushed costs as little as $32.13 on 2 August however a bounce-back occurred close to the 0.5 Fibonacci retracement line.
Supply: TradingView
Do the bulls nonetheless have an opportunity?
ETC’s incapacity to remain above the 0.618 Fibonacci degree is one other indication of bullish weak point. This end result would possibly ultimately give strategy to the bears. A few of Ethereum Traditional’s indicators already level in direction of such an end result.
ETC’s RSI has already retraced considerably beneath the overbought zone. On 10 August, it was beneath the 14-day SMA, confirming that the general pattern favored the bears.
Supply: TradingView
Ethereum Traditional’s MACD collaborates the statement with the RSI as promoting quantity could be seen rising. The MACD has already crossed beneath its sign line. The 26-day EMA is inverted beneath the 9-day EMA.
Supply: TradingView
The above indicators level in direction of an elevated risk of an prolonged bearish retracement within the subsequent few days.
There are some on-chain metrics that appear to align with this narrative.
For instance, ETC’s social dominance dropped considerably within the final two days.
The share of stablecoin whole provide improve since 3 August means that whales holding greater than $5 million value of ETC trimmed their balances.
Supply: Santiment
Though Ethereum Traditional seems to be ripe for a deeper bearish pullback, there are additionally some hopes of a restricted draw back.
For instance, the weighted sentiment metric at press time was -0.51, which meant that it was low sufficient to favor extra shopping for stress.
Supply: Santiment
That being stated, ETC has additionally kicked off this week with sturdy improvement exercise. This would possibly incentivize ETC holders to retain their cash or encourage extra shopping for stress.
Ethereum Traditional’s sturdy value motion within the second half of July means that it may be a “purchase the rumor, promote the information” end result. Because of this, traders ought to hold an in depth eye on its efficiency because the Merge attracts nearer.
