The ETC price appears to be benefiting from its upcoming “fifthening” next month.
On March 22, traders increased their wagers on Ethereum Classic (ETC) becoming a shelter for miners fleeing the rival Ethereum blockchain, despite a lethal “death cross” on the weekly chart.
For the first time since December 9, 2021, the price of ETC rose over 15.5 percent to $44 per token. The coin’s intraday gains were part of a larger bounce that saw its price rise by more than 75 percent eight days after hitting a low of $25.
The majority of ETC’s upward movement was based on overall crypto market movements. The Ethereum Classic token, for example, had a very high correlation with Bitcoin (BTC), the most valuable cryptocurrency by market capitalisation, hitting 0.98 on several occasions.
When the correlation coefficient between the two assets is 1, it means they move in lockstep.
However, ETC’s 75 percent+ gains over the last eight days surpassed BTC’s 15.5 percent gains during the same time period. This could be related to concerns about Ethereum Classic’s capacity to draw miners from Ethereum.
Are you looking for a “viable alternative” to Ethereum miners?
In comparison, Ethereum Classic failed to attract as many users, leaving the network in the hands of a small number of miners. This resulted in a $1 million double spend assault against Coinbase in January 2019 as well as other 51 percent attacks on the network.
Cardano creator Charles Hoskinson later revealed that his company, IOHK, had launched the Mantis project to update Ethereum Classic and serve its community in December 2020.
“Ethereum’s shift to Proof-of-Stake and Sharding may disrupt many in the community who favour PoW and a robust base-layer approach to blockchain security,” the cooperative said last year, adding that “this is where #EthereumClassic becomes a viable alternative for #Ethereum projects to migrate to.”
The hash rate has not increased to new all-time highs as ETC surges in March, implying that miners aren’t yet going over. Nonetheless, as evidenced in the tweets below, social media has begun to adopt the miner exodus motto.
ETC is rising because its tech. indicators turned bullish on 3/18. Also, $ETH will go #PoS in few months, hence #ETC stands to benefit from increased hashrate and security, as miners look for alternatives.
— Weiss Crypto (@WeissCrypto) March 22, 2022
— ETC Sage Capital (@EtcSage) March 20, 2022
— BreakoutRob.ETC (@BreakoutRob) March 21, 2022
That ETC block reduction, too.
The price of ETC has also risen in anticipation of the third block reward reduction, or “fifthening,” which is set to occur on April 15, 2022 at block 15,000,000.
Following the upgrade proposal ECP-1017, which was launched in 2017, the Ethereum Classic’s block rewards are reduced by 20% every five million blocks (approximately every 2.5 years).
The most recent of these occurrences occurred on March 16, 2020, and ETC has since risen by more than 350 percent.
We pumping the markets because ETC halving in 40 days? pic.twitter.com/dah4P3YeU4
— 50Sats – maintain your pride (@stacksats42069) March 22, 2022
ETC appears to be oversold on a technical level, with its daily relative strength index climbing above 70, indicating a sell signal. The ETC/USD pair is currently testing $44 as interim barrier, a level that has previously served as strong support between July and December 2021.
As a result, ETC could correct towards its 200-day exponential moving average (200-day EMA) of $37 in the near future. A decisive move over $44 on the other hand, may see it aiming for $50 a psychological barrier level as an interim upward goal.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.