Ethereum Classic (ETC) was among the few cryptocurrencies to have seen a significant rise in the past few days, but its rise was short-lived. During the weekend, with the support of strong accumulation, ETC managed to light 4 green candles in a row from May 21 to May 24. ETC bulls pushed ETC from prices below $20 to a weekly high of $25.69 before encountering some resistance. The $25 price range appears to have previously acted as a support range. At this point, it was once again seen that it is quite common to see support zones turn into resistance zones, and the price retreated from this zone.
ETC's $25 price range appears to be acting as a key resistance, marking a relief zone for the bulls. After its correction in the last 24 hours, the ETC price dropped to $22.34, experiencing a significant drop at the time of writing.
A closer look at the technical indicators for ETC shows that the price has shown resistance and is experiencing a pullback at the neutral line of the RSI. The MFI is currently pretty close to the upper limit of 80 and is currently showing signs of a potential reversal. This is very much in line with the expectations of some exits during the downtrend.
The current expectation is that more bearish strength will force the MFI to move further down. Also, +DI and -DI seem to be interacting at the moment as the price is facing a directional momentum change. It can also be clearly seen on the price chart that ETC's 50-day MA has recently bounced back below the 200-day MA due to bearish market conditions over the past few weeks as the price has diverged quite a bit.
Both Binance funding rate and FTX funding rates dropped significantly during the trading session on May 25. The metrics revealed that interest from the derivatives market has waned over the past two days, reflecting the downward pressure on Ethereum Classic's price action.
ETC's price rally over the past few days reflected increased trading volumes from May 21. The surge in supply of Ethereum Classic, which was bought and held by whales over the weekend, explains its bullish performance. Also, increased activity was noted in the volume metric, but the volume seems to have dropped a bit at the time of writing.
Due to the uncertainties in the market, it is unclear how much the correction of the rise will bring the price down. However, a price retest can be seen below $20 and lower levels could be tested if there is a significant market-wide decline. While ETC's short-term performance shows a bearish trend, it still remains bullish considering its long-term outlook and massive price cut. The expectation that miners will heavily turn to Ethereum Classic after the transition of the Ethereum network to PoS is also among the factors that support the price in the long run.