© Provided by BenzingaEthereum Classic (CRYPTO: ETC) plummeted down almost 10% on Monday following Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), which were trading down over 7% and 8%, respectively.The crypto markets have also begun to trade in correlation with the overall markets this year due to Bitcoin and a number of altcoins being adopted by companies such as Square Inc (NYSE: SQ) and PayPal Holdings Inc (NASDAQ: PYPL).
See Also: Why Bitcoin And Ethereum Are Trading Lower Today
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The Ethereum Classic Chart: Ethereum Classic fell through a key level at the $50 mark which has both price history and psychological support. The dip down to $47.22 was bought, however, and Ethereum Classic bounced back north to regain support of the 200-day simple moving average.
The long lower wick demonstrates bulls bought the dip but the above-average volume on the decline shows there are more sellers than buyers.
By mid-afternoon on Monday Ethereum Classic had a trading volume of over 317,000 compared to the 10-day average of 216,950. Volume is a momentum indicator and bullish traders prefer to see lower prices on lower-than-average volume.
Ethereum Classic’s relative strength index (RSI) has reached 34%, which brought the crypto down toward overbought territory. When a stock or crypto’s RSI drops near or below 30% it is a buy signal for technical traders. The last time Ethereum Classic’s RSI dropped to 34% was on July 2, then its price shot up over 100% in the month that followed.
Ethereum Classic is trading below the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending below the 21-day, both of which are bearish indicators. Bulls will want to see the crypto close the day above the 200-day SMA for confidence a bearish sentiment change isn’t in the cards.
Bulls will also want to see consolidation and then for big bullish volume to come in and drive Ethereum Classic back up above the $50.93 level. If the crypto can regain the level as support it could head back up toward $55. Bears want to see sustained big bearish volume drop the crypto down below the 200-day SMA and for momentum to push Ethereum Classic down toward a descending trendline which has in play since June 1. If the crypto doesn’t respond bullishly to the trendline it could fall back toward the $40 level.
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