Ethereum Classic Jumps 54% In a Week, But History Shows That the Rally May Not Last
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 cryptoassets 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 repeatedly, 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 consistently traded lower against ETH, despite shorter periods of strong outperformance.
Major spikes in the price of ETC versus ETH were seen in August and December 2016, September 2018, February 2020, and May 2021. After each spike, however, the market always reversed lower again, with ETC generally ending up at a lower level than before the price rally started.
Price of ETC/ETH since 2017:
Notably, 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 currently support the network in an uncertain situation.
Ethereum Classic, on its end, has vowed 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 a object of capital speculation,” Chinese crypto-focused journalist Colin Wu wrote on Twitter on Sunday.
A stagnation of the hashrate on Ethereum has already been seen over the past two months, although there are no signs yet in the data that suggests more miners are moving to ETC.
Ethereum hash rate past six months (7-day moving average):
Meanwhile, 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. Further, 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, however, 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 indicate that the rally will soon end.
Price of ETC/USD:
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