Ethereum Classic (ETC) Price Hits $20 Support Amidst $800K Liquidations in Futures Market

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The price of Ethereum Classic (ETC) has recently plunged to the $20 support level, raising concerns among investors.
Notably, liquidations in the Ethereum Classic futures market have surged, impacting long positions significantly.
A falling wedge pattern offers potential bullish prospects, despite the current downward trend.

Ethereum Classic (ETC) faces critical price levels amid market uncertainty, with futures liquidations disrupting potential recoveries.

Unprecedented Surge in ETC Futures Liquidations

The Ethereum Classic futures market has experienced a dramatic influx of liquidations, particularly affecting long positions. Over the past 24 hours, liquidations exceeded $800,000, according to Coinglass data. This substantial sell-side pressure resulted in Ethereum Classic’s price re-testing the $20 support level.

Implications for the ETC Market

The excess in liquidations can lead to increased volatility and hinder attempts for price recovery. The notable liquidation of long positions underscores the market’s bearish sentiment, making price stabilization challenging. With futures traders collectively facing losses of approximately $266 million, the market mood remains tense and uncertain.

Technical Analysis: Will the $20 Support Hold?

Ethereum Classic’s price hovers precariously around the $20 mark. This critical support level must hold to stave off further declines. Currently, ETC is trading below the 20-day, 50-day, and 200-day Exponential Moving Averages (EMAs). These technical indicators reinforce a bearish outlook, suggesting that sellers maintain the upper hand.

Death Crosses and Bearish Signals

The convergence of the moving averages has led to the formation of two death crosses, a bearish signal that suggests more downside potential. This development may prompt traders to continue shorting ETC, further testing the $20 support. The Relative Strength Index (RSI) exhibits bearish divergence, a clear indicator encouraging traders to maintain short positions.

Potential for a Bullish Reversal

Despite the bearish technical indicators, there is a glimmer of hope for a reversal. A falling wedge pattern has emerged on ETC’s four-hour chart, often seen as a precursor to bullish breakouts. Traders might see this pattern as an opportunity to enter long positions, targeting a possible price surge to $23.

Risk Management Considerations

Entering long positions based on the falling wedge pattern necessitates careful risk management. Traders should set stop-loss orders just below the wedge to mitigate potential losses. The 9% breakout target from $20 to $23 is derived from the wedge’s height, indicating a promising recovery possibility under the right conditions.

Conclusion

Ethereum Classic is navigating a critical juncture, with futures market liquidations exerting downward pressure and technical indicators favoring bearish trends. However, the falling wedge pattern offers a potential bullish setup that could drive ETC’s price higher. Maintaining the $20 support is crucial for any potential recovery, and traders should exercise caution and use effective risk management strategies.

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