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Ethereum Classic [ETC] It just completed its most bullish month in July, in which it rose more than 200%.
If you’re holding ETC, chances are you’re wondering whether to sell or hold in anticipation of a more bullish rally. Here are some things to consider that may help you make a more informed decision.
After rallying 244% in July, ETC has found resistance just above the 0.786 Fibonacci retracement level.
This was the biggest rally since the bear market began in 2021, but some investors have already capitalized by taking profits.
As a result, ETC is down as much as 28% so far. Expected result considering the heavy uptrend.
Source: TradingView
Despite the bearish decline, ETC is already experiencing healthy demand in the first week of August. Its price of $37.59 represents a 17% rally over the past two days after bouncing off the 0.5 Fibonacci level.
This confirms that ETC is still experiencing healthy demand at its current level, and more importantly, relatively low selling pressure.
Evaluation of possible outcomes
The above observation suggests that Ethereum Classic can maintain its price level above $30 and possibly look for more upside.
However, this would require an incentive to encourage investors to HODL. The recent rally may have been supported by the expectation that many investors and miners who prefer a Proof of Work consensus will switch to Ethereum Classic.
Ethereum Classic’s market cap growth confirms a strong capital inflow, especially since mid-July.
Its market capitalization more than doubled from less than $2 billion around mid-July to $5.9 billion as of July 29. The network also saw a healthy uptick in development activity, thus helping boost investor sentiment.
Source: Santiment
While healthy growth activity may provide a healthy boost, the jury is still out on market forces in August. If the month turns out to be bullish for the crypto market, then ETC will potentially experience more upside.
On the other hand, if the bears reassert dominance, they will wipe out ETC’s gains.
Well, the token’s strong rally in July is a testament to the strong demand the cryptocurrency gathered after a previous period of sharp decline.
The cryptocurrency market has generally shown bullish power, but a similar effect was seen in the second half of March. Investors should therefore proceed cautiously should a similar outcome occur.
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