Ethereum Classic [ETC] and its technical analysis you need to know this month

  • Ethereum Classic’s hash rate is gradually decreasing after previously bringing tension into the network
  • ETC’s current short-term outlook looks bearish

Ethereum Classic [ETC] could be one of the best cryptocurrencies for short-term traders in the second half of 2022. The price action has been moving within a support and resistance area since August, which could affect performance in the first week of December.

Read Ethereum Classics [ETC] Price prediction 2023-24

However, one of the most notable developments in the ETC network has been the increasing hash rate in recent months, which may have played a part in the price action.

The Ethereum merger resulted in a mining shift to ETC, which subsequently increased the network’s capacity, investor expectations of the network, and demand for the cryptocurrency.

Source: CoinWarz

In addition, ETC’s hash rate has been gradually decreasing since September, recently falling below 130 TH/S. Why is this an important observation? Well, the hash rate may have boosted investor confidence, but more downside may also have a negative impact on investor sentiment.

The drop in hashrate was in line with a retest of Ethereum Classic’s short-term declining support. Thus, there is a higher probability of a bearish reversal near the $20 price level.

Ethereum Classic price action

Source: TradingView

ETC can swing both ways

ETC’s RSI was nearing the 50% level at the time of writing, which has historically acted as a take-profit zone during a rally. If this result becomes a reality, it could present a short-term opportunity for short sellers. A retracement could potentially push the price back to the $18.5 price range.

The above expectations are based on the assumption that Ethereum Classic’s price action will remain bound to the support and resistance area. A pattern breakout is also likely, especially if market sentiment continues to improve in favor of the bulls.

ETC’s volume started in December with a slight decrease. Thus indicating that the upside may lose momentum.

Ethereum Classic volume

Source: Sentiment

A lack of significant demand to sustain the bullish trajectory will inevitably give way to the bears. Ethereum Classic’s market cap has already fallen by as much as $53 million in the last 24 hours. This net outflow was confirmation that selling pressure was already building.

Ethereum Classic market cap

Source: Santient

Market sentiment unsurprisingly favored the downside over the past five days as ETC’s weighted sentiment recorded a significant drop. This indicated that investors were gradually moving towards a bearish expectation.

Ethereum Classic Weighted Sentiment

Source: Sentiment

The odds of a bearish retracement are high, given that the above calculations and chart observations lean towards the bearish side. Nevertheless, investors should keep an eye on factors that could change the expected direction.

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