Ethereum’s transition to proof-of-stake could be a boon for the price of Ethereum Classic.
Ethereum Classic (ETC) has been outperforming its arch-rival Ethereum’s native token Ether (ETH) during the current crypto market rebound with the ETC/ETH pairs at 10-month highs.
Why is ETC beating ETH?
ETC’s price has risen to $27 on July 22, amounting to a 100% gain in nine days after bottoming out at $13.35. Comparatively, ETH’s price has seen a 64% rally in U.S. dollar terms.
Ethereum’s rebound has been among the sharpest among the top cryptocurrencies, primarily due to the euphoria surrounding its potential network upgrade in September.
Dubbed “the Merge,” the long-awaited technical update will switch Ethereum from proof-of-work (PoW) to proof-of-stake (PoS).
Anyone who believes the #Ethereum #Merge is priced in is smoking crack.
Nothing is priced-in in crypto, especially an event as convoluted and unprecedented as this.
But If I were a betting man, I’d say $ETH goes up prior to Merge, drops on Merge (unlocked coins), then goes
— Jeremy Gardner (@Disruptepreneur) July 21, 2022
Moreover, it will replace miners with stakers. As a result, the PoS switch could force existing Ethereum miners to switch to PoW chains.
Unsurprisingly, Ethereum Classic is the closest to Ethereum in terms of network design and compatibility because Ethereum Classic is the legacy chain split from Ethereum following a contentious hard fork in July 2016.Â
Speculators are thus anticipating Ethereum Classic to become the first choice for miners migrating from Ethereum, and this is likely one of the main reasons ETC’s recent price surge.Â
#ETC is not just pumping. It has a FIXED monetary policy! It is programmable! Yes all Dapps on #ETH can run on $ETC. After the #ETH 2.0 merge, miners like myself will call #EthereumClassic home. Retweet for CodeIsLaw! pic.twitter.com/sABGc72NUk
— Patient Money (@MoonTigerSt) July 19, 2022
ETC price technicals lean short-term bearish
From a technical standpoint, Ethereum Classic has been reeling under the pressure of its 200-day exponential moving average (200-day EMA; the blue wave in the chart below) near $27.35.
ETC/USD has witnessed a strong bearish rejection near the wave resistance on July 19, confirmed by the largest spike in its daily trading volume in almost a year. In addition, the rejection came after testing the 0.382 Fib line at around $27.47 as resistance.
Related: All ‘Ethereum killers’ will fail: Blockdaemon’s Freddy Zwanzger
ETC now consolidates inside the $22–$25 price range with its interim bias skewed toward the downside due to an “overbought” relative strength index (RSI).
ETC eyes a decline toward its 50-day EMA (the red wave) near $19 if it decisively breaks below $22—over 25% lower than July 22’s price.
Conversely, a successful break above $25 and the 200-day EMA could have ETC’s price rally over $30.
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