Key Takeaways:
- Ethereum Classic (ETC) could cool off after a 135% monthly rally.
- The jump was facilitated by a $10 million investment.
- ETC got further boost from Vitalik Buterin calling it a "fine chain."
YEREVAN(CoinChapter.com) – Ethereum Classic (ETC), an offshoot of the Ethereum blockchain, saw its token jump 45% since July 26, bringing the monthly value gains to 135%. As a result, the ETC/USD exchange rate stood at $33 on July 28.
While several factors influenced Ethereum Classic, the rally could fizzle out in the upcoming sessions due to low interest from traders and ‘overbought’ fears.
ETC price bearish technicals
Ethereum Classic value pumped 45% in the previous three days. However, the declining trading volumes on the four-hour chart suggest a lowering interest among traders, as they don’t expect the asset to offer more gains.
ETC’s relative strength index (RSI) also charted through ‘overbought’ territory since July 27, hinting at a looming reversal.
Also read: Ethereum Classic (ETC) price soared 90% in July.
In short, traders use the RSI as a gouge of token price evaluation. When the oscillator drops below 30, a bullish reversal could be expected. Conversely, when the RSI shoots above 70, many traders could consider the asset overbought and pull their bets.
What propelled Ethereum Classic?
Meanwhile, as CoinChapter reported earlier, AntPool, an affiliate of mining rig giant Bitmain, announced a $10 million investment to support the Ethereum Classic ecosystem, boosting the bullish incentive. The mining pool also informed of plans to continue investing more.
Also read: Ethereum (ETH) Bullish Despite Recent Drop, What Could Trigger Fresh Rally.
What about mining?
Meanwhile, miners didn’t take the much-expected Ethereum Merge news well, as the proof-of-stake consensus renders mining obsolete. Thus, they could flock to Ethereum Classic instead and benefit the Network, as the latter uses proof-of-work.
Furthermore, Ethereum’s vector towards proof-of-stake is what triggered the blockchain to fork in the first place and chip off as Ethereum Classic.
The blockchain’s co-founder Vitalik Buterin voiced the same opinion during the Ethereum conference in Paris on July 22, calling Ethereum Classic a “totally fine chain.”
There are plenty of blockchains, like there is the Ethereum Classic, which is the original Ethereum…they are a very welcoming community… If you like proof of work, you can go and use Ethereum Classic. It is a totally fine chain.
said the CEO.
Also read: Ethereum (ETH) risks dropping to $1.3K ahead of the Merge — what to expect?
Despite fundamental drivers behind Ethereum Classic’s recent rally, technicals point to a cool down, if not a reversal. In detail, the trading volumes have declined since peaking on July 27 and testified to the growing disinterest, and the RSI charted at an ‘overbought’ 82.
