• Ethereum Classic price is stuck between a rock and a hard place with bears slightly in control.
  • A tight Bollinger Bands squeeze points at a potential breakout in the short term.
  • Buyers must defend the demand area at $26.50 to prevent losses from tagging $23.00.

Ethereum price is still erasing gains made during its pre-Ethereum Merge rally to $45.68. ETC did not react to a relief rally across the market on Tuesday. Instead, sellers ramped up their activities pushing price to its support at $26.50.

Ethereum Classic price could flip $26.50 support into resistance

Ethereum Classic exchanges hands marginally below the Bollinger Bands indicator’s middle throughline. A squeeze is evident and appears to be tightening (signaling low volatility) by the hour – implying a breakout is around the corner.

Bollinger Bands help traders gauge market volatility while identifying potential overbought and oversold conditions. If the candlesticks break out below the bottom band, Ethereum Classic price will continue to explore downhill levels.

ETH/USD 12-hour chart

ETH/USD 12-hour chart

Ethereum Classic price currently enjoys support from the demand area set at $26.50. If this stays unbroken, ETC will start to chart its way into a recovery move. However, the overall technical picture is largely bearish, as seen with the consecutively forming bearish candles.

On-chain data from Santiment, to some extent, explains the weakness shown by Ethereum Classic price. From the chart below, the amount of ETC tokens transacted on-chain has dropped to 332.43 million, nearly three months after topping out at 5.57 billion.

Now, Ethereum Classic price lacks the bullish momentum to hold onto key support areas, let alone sustain an uptrend. As long as this on-chain volume keeps falling, investors should acclimatize to ETC price, stretching its retracement to $23.00 and possibly even July’s support at $13.80.

Ethereum Classic Volume

Ethereum Classic Volume

On the other hand, its immediate support at $26.50 may help provide a foundation for Ethereum Classic price to recover toward the Bollinger Bands’ middle boundary. Buyers should also prepare to deal with the supply area highlighted at $30.71 by the 50-day SMA (Simple Moving Average), red. Otherwise, ETC will consolidate between $26.50 (lower range limit) and $30.71 (upper range limit) before significantly breaking out.

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