Ethereum Classic [ETC] rises upward, but could it be a bull trap

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

On 12 May, Bitcoin sunk to $26.7k, and Ethereum Classic touched the $16 mark at its lows. Since then, the price has bounced quite a bit. Yet, with Bitcoin stuck within a range of $30.7k and $28.7k, the altcoin market has not initiated a recovery. The fear in the market remained strong, and rallies are for selling. This likely holds true for Ethereum Classic too, and the $24 level saw the price pullback to $22.

Could the bears impose their will on the market once more?

ETC- 1 Hour Chart

Source: ETC/USDT on TradingView

For the move up from $19.41 to $24.23, a set of Fibonacci retracement levels was drawn (yellow). On the lower timeframes, the price has formed a series of lower highs and lower lows in the past four days. The push past $21.8 the previous day by the bulls was on high trading volume, although the pullback also saw heavy volume. However, it appeared to suggest that the buyers had some power in the market.

Now the question is- Could Ethereum Classic continue to climb? It certainly appeared so on the hourly timeframe. Yet, an inspection of higher timeframes showed that the $24.4 level was a strong resistance level. At the same time, the $21.6-$21.8 area has been flipped from resistance to support. A move beneath $21.6 would likely signal bearish strength in the coming days.

Rationale

Source: ETC/USDT on TradingView

The Awesome Oscillator saw a sharp spike upward in response to ETC’s rally to $24.2. However, in recent hours, the price slipped back beneath the zero line to show rising bearish dominance. At the same time, the MACD also formed a bearish crossover and dived toward the zero line.

The A/D has been relatively flat in the past week, apart from the wild swing upwards on the previous day. This suggested that buying and selling pressure has been nearly equal. If Ethereum Classic was on the verge of recovery, the A/D would likely have been climbing in recent days to show strong buying volume. However, this was not the case.

Conclusion

The lack of buyers, combined with the fears around Bitcoin, suggested that Ethereum Classic had a good probability of heading lower on the charts. The $21.6 mark is one to watch out for, and a session close beneath this level could push the prices lower on the chart.