ETC drops to its mid-range level – Are short-sellers’ gains limited?

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

Since 17 March, Ethereum Classic [ETC] has been oscillating between $19 and $22.26. In the past few days, the price action consolidated narrowly below the channel’s mid-level of $20.66, only breaking out after Bitcoin [BTC] crossed $30K.

But the ETC hit a price ceiling at $22.26 and retraced to its range’s mid-point. 

Read Ethereum Classic [ETC] Price Prediction 2023-24

Will the range’s mid-point of $20.66 prevent the plunge?

Source: ETC/USDT on TradingView

At press time, ETC’s value was $20.93, down by 0.93% but with an increased trading volume of over 100% in the past 24 hours, according to Coinmarketcap. The Relative Strength Index (RSI) had dropped to the neutral line – the price could go in either direction.  In addition, the Average Directional Index (ADX) had a downtick, showing a weakening market structure. 

On the other hand, the Money Flow Index (MFI) retreated from the overbought zone – an outflow of money from the ETC market, but the outflows were easing at press time. Ergo, ETC near-term bulls could defend the channel’s mid-point of $20.66 if BTC doesn’t fall below $30K. However, the hurdle at $21.49 must be cleared for a retest of the range’s upper boundary of $22.26 to occur. 

Conversely, ETC could breach the $22.06 support, especially if BTC falls below $30K. But the plunge could slow at $20 or the channel’s lower boundary of $19. These levels could act as shorting selling targets in such a downswing scenario. 

ETC saw more liquidations of long positions

Source: Coinglass

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According to Coinglass, ETC’s funding rates have remained relatively positive in the past few days – a bullish sentiment that could lead to a rebound at the channel’s mid-point of $20.66. 

However, there have been more liquidations of long positions than short positions in the past 24 hours. According to Coinalyze, there were more than $1M in total liquidations, and long positions worth over $980K were wrecked in the same period. 

Short positions accounted for about $280K of total liquidations, showing longs were paying shorts – a bearish outlook that could give short-sellers more leverage. The market structure calls for caution, and investors should track BTC price action before making moves. 

Source: Coinglass