Ethereum Classic ETC/USD plunged almost 8% lower at one point during Wednesday’s trading session after initially attempting to break above Tuesday’s high-of-day.
The sharp decline came in tandem with the broader cypto sector, which reacted negatively to the S&P 500, which attempted to regain a long-term descending trendline as support but failed.
Traders are watching for signs of whether the S&P 500 recently regaining the 200-day simple moving average, which occurred on Jan. 13, is an indication of a new bull cycle or if it’s another bull trap.
Since Jan. 4, 2022, the S&P 500 has regained the 200-day SMA on a few occasions but has been unable to hold above the level. The start of big-tech earnings, which will kick off when Netflix reports its results on Thursday, could help the market begin to choose a longer-term direction.
Unlike the S&P 500, Bitcoin BTC/USD and Ethereum ETH/USD, Ethereum Classic hasn’t yet regained the 200-day SMA, which means the crypto is in a bear cycle. When Ethereum Classic fell to the low-of-day on Wednesday, however, it didn’t negate its current uptrend with a lower low.
This indicates the uptrend is intact and if the trend continues, Ethereum Classic could rise up to test the 200-day SMA as resistance over the coming days.
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The Ethereum Classic Chart: Ethereum Classic’s most recent higher high within its uptrend was printed on Saturday at $23.91 and the most recent confirmed higher low was formed at the $19.44 level on Jan. 11. If Ethereum continues to trend lower on Thursday, bullish traders will want to see the crypto print a bullish reversal candlestick, such as a doji or hammer candlestick above $20.
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