- Ethereum Classic’s market cap drops sharply, indicating an increase in selling pressure
- ETC investor sentiment changed and now favors the coin at time of writing
Ethereum Classic [ETC] Last week, the price tested its short-term resistance line. The price performed sideways, rather than a bearish rebound or a bullish breakout. ETC displayed signs of price slippage at press time.
Read about Ethereum Classic’s [ETC] price prediction 2023-2024
ETC traded alongside the resistance line over the past few days. Recent observations point to a possible bearish outcome. Market cap outflows was one of those observations. ETC’s market cap fell by roughly $82 million in the last 24 hours at the time of writing.
This was the biggest daily drop in market capitalization that the cryptocurrency has experienced over the past seven days. Furthermore, the bearish observation wasn’t the only indicator of Ethereum Classic’s bearish start.
In the past 24 hours, social dominance also saw a substantial decline. This was a sign that investor attention was shifting to other areas.
Source: Santiment
In particular, the Binance funding rate has seen a significant drop in the past two days. This also confirmed the fact that there was less demand for derivatives.
Are investors able to expect a deeper ETC collapse?
Market cap drops and other indicators pointed to a bearish bias. This looks like a bearish retracement. However, there were certain factors that supported ETC and others that opposed it. One of the key factors suggesting a significant likelihood of a bearish outcome was ETC’s price action.
ETC fell by approximately 5% over the past two days. This may seem like a small decline, but the important takeaway was that the drop threatened to push the price lower into the narrow support-resistance range.
Source: TradingView
If the selloff gains momentum, investors can expect a strong bearish performance that will result in more outflows. However, it was possible that ETC whales might still grab more ETC. This could be a support for a bullish rebound.
A change in investor sentiment was the main reason for a bullish bounce. Despite the overall downturn, weighted sentiment saw an increase.
Source: Santiment
What’s ETC’s final stance?
It was clear that Ethereum Classic appeared bearish at press time. However, the weighted sentiment could prove to be a game-changer in terms of expectations.
If investor sentiment continues to rise, it could mean that we may see significant accumulation. This will likely to protect ETC against more downside and possibly favor the bulls.