Ethereum Classic holds it together for now as markets headwinds pick up speed again

Ethereum Classic (ETC) price action slips back to the opening price of Monday at $23.11 and even breaks below it by 2 cents. This turns the week's performance negative as traders take the current economic backdrop into account. After some surprising and upbeat earnings, reality kicks back in again as markets prepare for the next week's ECB meeting.

ETC price action recalibrates on the back of UK inflation and the ECB

Ethereum Classic price action has turned red this week after markets rallied behind surprisingly positive earnings. Investors and traders were on edge about the risk that earnings would start to drop, disappoint and hold some downgrades and negative outlook forecasts from several entities. Instead, it looks like earnings are not cracking just yet as several stocks outperform. It is creating a wave of relief and starting to see traders put money to work by going long equities and – via a slimmed-down version – long cryptocurrencies.

ETC price, however, sees sentiment worsening after UK inflation numbers revealed that inflation is still elevated and even climbing. This has stressed out traders ahead of the ECB meeting next week. Both the BoE and the ECB have the issue that they can not hike too aggressively as it would trigger a massive recession and a wave of bankruptcies in small and mid-sized corporations, but at the same time must preserve the disposable household budget of families as inflation is at risk of eating that up. ETC price thus sees an unwind of those long positions from Monday and could see a continuous fade towards Friday, with price action set to slip below the monthly S1 and hit $20.

 ETC/USD Daily chart

For now, the fade looks fairly contained, and the weekly profit could still be saved should this only be a small step back. Once the US session later this evening kicks in the event that strong earnings are again put out there, expect to see traders putting back on or adding to their existing long positions. That would mean that ETC price action has room to jump higher and could touch $26 by the end of this week.