Ethereum Classic previously broke below support around 10.500 but is now pulling back to this area of interest. This lines up with the 50% to 61.8% Fibonacci retracement levels, which might be enough to keep gains in check and allow the drop to resume.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse, possibly taking Ethereum Classic to the swing low at 9.059. The 100 SMA also lines up with the 38.2% Fib to add to its strength as a ceiling while the 200 SMA dynamic resistance is in between the higher Fibs.
Stochastic is still heading up and has a bit of ground to cover before indicating overbought conditions. This suggests that buyers could have enough energy to push for a higher pullback, with sustained bullish momentum possibly leading to a break past the Fibs. In that case, a reversal from the drop could ensue. RSI appears to have reached overbought territory already and may be looking to turn back down.
The SEC launch of its FinTech platform for ICO regulation might prove positive for Ethereum Classic and other similar blockchains in which most tokens are built as this would weed out potentially fraudulent ones. With that, a big rebound could be in order for this particular digital asset if its legitimacy is highlighted.
According to the SEC:
Companies and individuals are increasingly considering initial coin offerings (ICOs) as a way to raise capital or participate in investment opportunities. While these digital assets and the technology behind them may present a new and efficient means for carrying out financial transactions, they also bring increased risk of fraud and manipulation because the markets for these assets are less regulated than traditional capital markets. That’s why we are providing this information about the three “Rs” of ICOs: Risks, Rewards and Responsibilities.
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