The price of Ethereum Classic (ETC), the project that split from Ethereum (ETH) after a hack in 2015, jumped over the weekend, supported by strong technicals in the chart and speculation that some Ethereum miners could embrace it.
As of 12:10 UTC on Monday, ETC traded at USD 39.03. The coin was up 8% over the past 24 hours and 54% for the past 7 days, making it the week’s best performer among the top 100 crypto assets by market capitalization.
At the same time, ETH was up 0.9% for the past 24 hours and 15% for the past week to a price of USD 2,904.
As has been seen frequently, however, periods of outperformance by ETC against ETH have rarely lasted for long. Since trading in the ETC/ETH pair went live on Kraken in mid-2016, ETC has constantly traded lower against ETH, in spite of shorter periods of strong outperformance.
A major upsurge in the price of ETC versus ETH was seen in August and December 2016, September 2018, February 2020, and May 2021. After each upsurge, though, the market always upturned lower again, with ETC generally ending up at a lower level than before the price rally started.
Remarkably, the rally for ETC comes as the best-known version of Ethereum is moving closer to transitioning to proof-of-stake (POS) as its consensus mechanism, leaving the miners who now support the network in an indefinite situation.
Ethereum Classic, on its end, has guaranteed to continue operating with the original proof-of-work (POW) algorithm, which could attract some Ethereum miners to switch to Ethereum Classic.
“With the approaching of Ethereum POW to POS, ETC may undertake some miners’ hashrate and become an object of capital speculation,” Chinese crypto-focused journalist Colin Wu tweet on Sunday.
Sluggishness of the hashrate on Ethereum has already been seen over the past two months, though there are no signs so far in the data that suggest more miners are moving to ETC.
In the meantime, ETC is looking bullish at the moment based on shorter-term technical analysis after yesterday’s surge brought the token above a recent high in the USD 36 to USD 37 area. Moreover, the last low in the price from mid-March marked a third ‘higher low’ in the daily chart of ETC, which is often seen as the beginning of a new uptrend.
Worth noting, still, is that the relative strength index (RSI), a popular indicator for the momentum behind price changes, is at its most overbought since August 2021. An overbought reading on the RSI could specify that the rally will soon end.
Leave a Reply