ETC’s ongoing price rebound looks eerily similar to a bull trap event from 2021.
Ethereum Classic (ETC) continues to reap benefits from its blockchain rival Ethereum’s upcoming transition from proof-of-work (PoW) to proof-of-stake (PoS).
Vitalik Buterin likes Ethereum Classic
Notably, ETC’s price jumped by a little over 20% to reach $27.50, two days after Ethereum co-founder Vitalik Buterin’s endorsement of Ethereum Classic went viral across social media. In his comments, Buterin presented the chain as a “fine” PoW alternative to Ethereum.
The statements appeared amid fears that Ethereum’s potential network upgrade this September will force PoW miners elsewhere.
In other words, they would be looking for alternative PoW networks to ensure that their rigs remain functional. That could benefit Ethereum Classic since it’s the original version of Ethereum and could therefore ensure an easy migration for miners.
ETC technical outlook
Impressively, ETC price has rebounded by over 120% since mid June, making it the standout performer over the past month. Nonetheless, it is still down over 85% versus its May 2021 record high of $185, suggesting that its ongoing retracement move could technically be a bull trap.
A convincing piece of evidence comes from ETC’s 150% price rebound between June 2021 and September 2021, which became a false recovery signal.
Interestingly, ETC’s ongoing price action appears similar to the one in 2021, as illustrated in the daily chart below.
Like in 2021, ETC this year has been consolidating inside the range defined by its 0.236 Fib line (~$28.50) as support and 0.382 Fib line (~$22.80) as resistance. Similarly, the token’s daily relative strength has been correcting from its “overbought” area during the price consolidation.
Related: This little-known DeFi crypto token has rallied over 800% in a month
Therefore, ETC could continue trending sideways in the $22.80-$28.50 price range, followed by a breakdown toward the 0 Fib line near $13.65.
In other words, a 50% price drop from today’s price.
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