Ethereum Classic risks serious declines as ETC rallies 70% in a week

Key Takeaways:

  • Ethereum Classic (ETC) rallied over 70% in the previous week.
  • Some technical indicators point at a possible correction.
  • Miners' migration and approaching halving might have fueled the price surge
Ethereum Classic, Ethereum Classic risks serious declines as ETC rallies 70% in a week
image from medium.com

YEREVAN (CoinChapter.com) – ETC, the in-house token of Ethereum Classic, a 2016 blockchain hard fork from the Ethereum Network, traded at $43 in Tuesday’s European session, after an explosive 70% weekly rally. The digital asset broke a significant resistance that hindered its upside moves since Sep. 2021.

In detail, the said resistance was a part of a bullish formation dubbed the Falling Wedge. The latter entails converging trendlines that gradually reduce the price swing and drop the asset’s value. However, the Falling Wedge predicts a bullish phase after the token breaks the resistance.

Ethereum Classic (ETC) daily price chart featuring a Falling Wedge. Source: TradingView.com
Ethereum Classic (ETC) daily price chart featuring a Falling Wedge. Source: TradingView.com

Moreover, due to the surge, ETC registered a Golden Cross on the daily chart. In detail, the setup occurs when a short-term exponential moving average (EMA) crosses above a long-term EMA, forecasting a bullish period ahead for as long as the dominance stands.

For example, ETC’s Golden Cross occurred between the EMA-20 (red wave) and EMA-50 (orange wave) on Mar. 20.

Also read: Ethereum Classic (ETC) token flashes conflicting technicals after a 6% uptrend.

However, the daily chart flashed several warnings as well. For example, the token’s relative strength index (RSI) shot into the ‘overbought’ territory, typically waving a bearish flag. In detail, the RSI is a momentum indicator that signals an unreasonably high or overbought price when it charts over 70.

Subsequently, some traders could pull their bets expecting a sell-off and cause a price decline.

Miners migrating to Ethereum Classic?

Sources report that Ethereum’s determination to phase out mining on the blockchain and replace it partially with staking might have attracted miners to the Ethereum Classic network. ETC Sage Capital, an Ethereum Classic-focused hedge fund, agreed. It announced that a mass migration of miners is behind ETC’s price uptrend.

Also read: Bitcoin death cross' spells more trouble as BTC risks decline to $30K. 

It is still early to say if the heightened interest in Ethereum Classic would last. However, the digital asset pushed its way into the top 10 smart contract platforms by market cap. The latter stood at $5.8 billion on Mar. 22.

Ethereum Classic (ETC) ranked #10 among smart contract platforms. Source: Messari.io
Ethereum Classic (ETC) ranked #10 among smart contract platforms. Source: Messari.io

Additionally, Ethereum Classic’s upcoming block reward halving might have triggered the latest rally. Simply put, it is the process of halving the mining rewards after each set of blocks is mined.

The halving process limits the supply of new coins by reducing mining rewards. Thus, prices could rise if demand remains strong. The exact time of the halving was delayed due to a slowdown in block production. But the team behind ETC expects the event at some point in March.

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Ethereum Classic, Ethereum Classic risks serious declines as ETC rallies 70% in a week

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