Ethereum Classic Overreacts To Bitcoin, Ethereum Pull Back: What's Next?

Ethereum Classic ETC/USD had a massive overreaction to Bitcoin’s BTC/USD retracement, plummeting over 20% lower at one point on Wednesday as compared to the apex cryptocurrency which was trading down about 2.5%.

When Ethereum Classic hit its low-of-day of $43.15 at 4 a.m. ET bulls came in and steadily bought the dip, which allowed the crypto to erase about 14% of the loss by midafternoon.

Unlike Bitcoin and Ethereum ETH/USD, Ethereum Classic has been unable to reach a new all-time high in October, with the crypto currently trading down over 70% below its May 6 all-time high of $175.

Although Ethereum Classic doesn’t look ready to make a run for blue skies anytime soon, it has settled into a pattern that could help the crypto see higher prices over the coming days.

See Also: Bitcoin, Ethereum, Dogecoin Take A Dive As 'Extreme Greed' Prevails, Shiba Inu Shoots To All-Time High

The Ethereum Classic Chart: Ethereum Classic had been trading in a sideways consolidation pattern between $50.55 and about $60.20 since Oct. 2, before breaking down from the range on Wednesday. When bulls came in and bought the dip, however, it caused the crypto to print a big bullish hammer candlestick on the daily chart, which indicates a bullish trend change may be in the cards.

Ethereum Classic had far higher-than-average bearish 24-hour trading volume on Wednesday, which indicates a high level of interest. By late afternoon Ethereum Classic’s trading volume stood at over 640,949 compared to the 10-day average of 301,561. Ethereum Classic will likely need to enter into another consolidation period eventually on low volume.

The bearish move on Ethereum Classic caused its relative strength index (RSI) to drop to 38%. Although it could still drop lower, the RSI is nearing oversold territory, which can be a buy signal for technical traders. When Ethereum Classic’s RSI dropped to 34% on Sept. 28 the crypto rallied 26% over the following nine days.

Ethereum Classic is trading below the eight-day and 21-day exponential moving averages, with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The crypto is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

The crypto has resistance above at $50.55 and $55.12 and support is below at $44.66 and Wednesday’s low-of-day.