- The Ethereum Classic price arose from the descending parallel channel and triggered an inside month on August 7th with a plus of 13.77%.
- ETC is now comfortably above the imposing high of $ 46.98 in 2018, allowing it to track higher prices.
- The altcoin saw an overbought signal in the daily Relative Strength Index (RSI) on Aug 7, which temporarily stifled the rally.
The Ethereum Classic price closed with an inside month in July, which triggered on August 7th with a plus of 13.77%. The price compression generated by the inside month should drive ETC to higher prices in the longer term. In the short term, the cryptocurrency is struggling to build on the breakout from the descending parallel channel and within the month, suggesting that the overbought condition of the daily RSI could affect the Ethereum Classic price.
Ethereum Classic price compression leads to an upward expansion
Over the past four months, Ethereum Classic price has seen a 62.79% increase on a closing basis despite the 80% plunge in May and June. Additionally, ETC closed July with a rare inside month on the bar charts. The inner month symbolizes the price compression and the potential for oversized movements as soon as the high or low of the previous month is broken.
With the price of Ethereum Classic now in a new cyclical uptrend and remaining in a secular uptrend, the upside resolution of the inner month should come as no surprise and suggests higher prices in the longer term.
ETC / USD monthly chart
The 13.77% increase on August 7th was the largest since June 29th, undoing the descending parallel channel that had been running the ETC since the May 19th low.
For the past three days, the price of Ethereum Classic has moved sideways, offsetting the breakout with the resulting overbought condition in the daily RSI. As long as ETC holds the upper line of the channel, it should be positioned for higher prices, including a test of the 38.2% Fibonacci retracement of the May-June correction at $ 80.75, a 36% increase from current price means.
The May 13th low of $ 78.25 and the highs between $ 79.55 and $ 84.08 on May 25th to May 28th reaffirm the strength of the resistance at the retracement level.
Fortunately for ETC speculators, the downside risk for the Ethereum Classic price should be on the union of the 50-day Simple Moving Average (SMA) at $ 48.82 with the 2018 high of $ 46.98, or near 20% of the current one Limited price.
ETC / USD daily chart
The bullish narrative would be challenged if the Ethereum Classic price closed below the 2018 high. The focus would shift to the convergence of the 2020 ascending trendline with the 200-day SMA at $ 38.87 and then to the July 20 low of $ 37.75. At this point, however, ETC investors should no longer trade altcoin.
Ethereum Classic price started the July 21 rally in a constructive position on its pricing structure versus multiple cryptocurrencies. ETC was well above the 50-week and 200-day SMAs and was not caught by resistance defined by the May lows or stifled by a bearish death cross pattern. The result was a rally of nearly 60% on yesterday’s high.
Today, the Ethereum Classic price remains in an advantageous position and has the technical prerequisites to encourage the ETC rally to continue to the 38.2% retracement level at $ 80.75. It’s just a matter of how long the consolidation will take due to the slightly overbought condition of the daily RSI.