Death Cross Forms on Ethereum Classic Daily Chart
Ethereum Classic (ETC) printed the death cross signal on the daily chart, which is a warning signal that calls for more downside. The death cross signal occurs when the short-term 50-day simple moving average crosses below the long-term 200-day simple moving average.
Ethereum Classic Price history
Ethereum Classic (ETC) has been in a bear market since January 2018.
In February 2018, ETC reached a high of $44.96, which was followed by a steep decline that sent the cryptocurrency all the way down to $7.32 in December 2018.
After a parabolic rise throughout 2019, ETC topped out at $13.86 in September 2020.
Following the rejection from the $13.86 level, ETC has been on a freefall that sent the cryptocurrency down to $5.98 in October 2020. Since then, ETC has been trading in a sideways range between $7.30 and $13.86.
Currently, ETC is trading at around the $17.50 level, which is right above the 50-day Simple Moving Average (SMA), which is at $17.20.
Death Cross Signal
The last time the death cross signal occurred in October 2021, ETC fell by 62%.
However, on the previous 3 occasions the death cross occurred, it acted as a contrarian signal. On average, the death cross signal has triggered around a 30% sell-off before bouncing back.
A 30% sell-off could send ETC's price down to around the $14 level.
Short-term, the ETC price is facing resistance around the zone between the $24 and $26 levels.
Simultaneously, the Relative Strength Index (RSI) oscillator is also approaching the 50 mid-level. Therefore, if the RSI oscillator is able to break above the mid-level 50, bullish momentum may come back to the market.
What is a Death Cross Signal
The death cross is a technical indicator that indicates a bearish signal on a price chart. The death cross occurs when the short-term 50 moving average crosses below the 200 long-term moving average, which signals that the bear market has taken control over the momentum.
Other Side of the Coin
On the flip side, a daily break and close above the $24 - $26 resistance zone could open the door for a retest of the 50-day SMA, which currently falls at $29.70. Further to the upside, the next major resistance comes around the $37.50 level.
The bullish breakout above the $37.50 level may be a huge bullish signal. It would confirm that the previous death cross signal was a false signal. Since the death cross signal has previously acted as a contrarian signal, a bullish breakout above $37.50 could be an enormous bullish signal.
