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How Summer Is Turning Into A Short-Lived Altcoin Season

Ethereum Classic (ETC), Filecoin (FIL), and Lido DAO (LIDO) have been dominating the altcoin sector as they outperform Bitcoin and other large cryptocurrencies. The first crypto by market cap has been recording its best month in 2022 but is still far from the monthly average return from these tokens.

According to Arcane Research, altcoins have seen an average of 40% performance over the past month as the crypto market experienced a “classic relief rally”. July has been a historical green month for digital assets.

During this period, the nascent asset class has seen the expansion of two critical sectors, decentralized finances (DeFi) and non-fungible tokens (NFTs). As seen below, the rally has been particularly positive for mid-cap cryptocurrencies.

Source: Arcane Research

This market rally has translated into a reduction of Bitcoin and stablecoins market share, suggesting an increase in risk appetite for crypto investors, and more strength for Ethereum. Arcane Research noted:

Ether’s lack of strength relative to bitcoin last week has been reversed this week, as ether has increased its market share by 0.43 percentage points, while bitcoin has lost 0.22 percentage points. Notably, bitcoin and stablecoin are losing market share this week (…).

Ethereum might be critical for understanding the current price action. The cryptocurrency has a tentative deployment date for “The Merge”, the event that will combine its execution layer (Proof-of-Work) with its consensus layer (Proof-of-Stake).

Altcoins, such as Lido Dao and Ethereum Classic, might benefit from the imminent shift in this blockchain. The former cryptocurrency has rallied because more users want to stake their ETH and participate in Ethereum (2.0) consensus model to receive rewards.

Ethereum Classic has seen positive performance because it might become a safe haven for ETH miners. This sector faces inevitable destruction as ETH’s new consensus model will validate transactions with a different mechanism.

ETH’s price moving sideways on the 4-hour chart. Source: ETHUSDT Tradingview
Will The Merge Provide Altcoins With Further Bullish Momentum

In that sense, and up to “The Merge” mainnet launch, altcoins might continue to extend their bullish trajectory. Data from a pseudonym user highlights the importance of this event and why it might inject fresh capital into this ecosystem further driving the price of Ethereum and the altcoin sector.

The user claims this cryptocurrency will become Environmental, Social, and Governance (ESG) friendly. This will provide new institutions with the confidence to bet on Ethereum’s long-term success. The user said:

No matter your personal thoughts on ESG, if you want mainstream cryptoasset adoption controlling the narrative around emissions and sustainability is essential. Bitcoin has decided to ignore the issue; Ethereum unlatching itself from PoW should be a positive for both assets.

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Why Ethereum Classic (ETC) Leads Crypto Market In Latest Week With 16% Surge

As the crypto market trended to the downside, Ethereum Classic (ETC) took advantage. The original Ethereum blockchain records double-digit profits across multiple timeframes and seems on track for future appreciation.

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At the time of writing, Ethereum Classic (ETC) trades at $30 with a 27% profit in the past day and a 20% profit over the past week. Data from Coingecko indicates that ETC’s price has been the best performing asset in the sector followed by Lido DAO (LDO).

ETC’s price with important gains on the 4-hour chart. Source: ETCUSDT Tradingview

This cryptocurrency records a higher increase than ETC’s price in the past 24 hours with 41% profits. Ethereum Classic has outperformed it in the past week, but it’s noteworthy that these two cryptocurrencies are rallying.

Lido DAO is a platform that offers users Ethereum (ETH) staking services. This allows retail investors to lock their ETH and receive a portion of the rewards from the upcoming Proof-of-Stake (PoS) migration without meeting the 30 ETH requirement.

Ethereum Classic (ETC) Will Extend Gains With “The Merge”

On the other hand, Ethereum Classic (ETC) is perceived as the alternative for ETH miners for when this blockchain completes its migration to a PoS consensus. This process is set to be completed in September 2022, with “The Merge”.

An event that will combine Ethereum’s execution layer with its consensus layer, ETH core developers only recently announced a fix tentative data for its mainnet launch. The blockchain has seen two successful implementations of “The Merge” on major Ethereum testnets.

This event represents the end of the ETH mining sector as it exists today. The PoS blockchain will validate transactions with a different mechanism.

Thus, miners will have to scramble to secure other Proof-of-Work (PoW) networks, like Ethereum Classic. As the chances of “The Merge” mainnet implementation increase, ETC’s price seems likely to follow.

Related Reading | Dogecoin Seen Doubling In Price, Despite Shedding 10% In Last 7 Days

Data from Material Indicators shows an increase in buying pressure from investors with bid orders of around $1,000. This spike was recorded close to “The Merge” tentative mainnet launch announcement.

Investors with bid orders of around $1,000 (green on the chart) buy into ETC’s price action. Source: Material Indicators

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Ethereum Classic (ETC) Reclaims $3 Billion Market Cap, More Upside To Follow?

Ethereum Classic (ETC) has followed the lead of its larger counterparts and posted some tremendous gains in the last couple of weeks. The token, which is an offshoot of the second-largest cryptocurrency, Ethereum, has been suffering due to the bear trend that has been plaguing the market. But as the sentiment has begun to turn, Ethereum Class (ETC) has emerged as one of the biggest winners of the last week.

Ethereum Classic Adds 80%

Ethereum Classic’s recovery in the last week has been nothing short of miraculous. Where other cryptocurrencies have been posting gains below 50%, the altcoin has surged more than 80% in the last 7 days alone. More specifically, Ethereum Classic (ETC) is up 83.505, according to data from Coinmarketcap.

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This recovery has taken the price of the digital asset and catapulted it into the mid $20s. After spending most of last week trending around $14, the price is now up almost 100% in this time period. In the same vein, the total market cap of the cryptocurrency has climbed. It added more than $1 billion to its market cap in the last two days alone, to be sitting at its current level of $3.97 billion at the time of this writing.

It is no surprise that the altcoin is surging at this time. It has always shown a tendency to follow the price movements of Ethereum. However, the margin by which it is surging above its predecessor has been wide, showing a deviation from this usual correlation.

ETC market cap crosses $3 billion | Source: Market Cap ETC on TradingView.com
ETC Is Not Done Yet

The indicators for Ethereum Classic (ETC) point to more steam in the current rally. An example is the fact that the digital asset over the last couple of days. It has consistently closed in the green in the last three days, and the indicators point to another green close for ETC.

Related Reading | Liquidations Cross $230 Million As Ethereum Barrels Past $1,400

Another daily close above $25 will likely see the price rally to $30 before the week is over. This will bring its recovery over the last one week to more than 100%. Its 100-day moving average is just under $27, so a cross to $30 would put it higher above this level, as well as higher than its year-to-date moving average. This will cement its bull trend over the next week.

There is still significant sell pressure mounting up as investors are taking out some profit. However, support is forming at $25, which gives it a soft landing if it is unable to break the $27 resistance. Also, if Ethereum’s recovery continues, then support will continue to pour in for Ethereum Classic, pushing its price further.

Featured image from The Coin Republic, chart from TradingView.com

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Ethereum Classic Displayed Double-Digit Gains; What’s Next!

Ethereum Classic had experienced a sharp fall in prices on the 17th January, however, at press time ETC was seen recovering. Over the last 24 hours, ETC had gained close to 7% and was seen trading at $28. In the past week, ETC logged gains of about 17% and had broken past the $25 price mark.

ETC struggled near the aforementioned price level for the past few weeks. However, with close to 17% gains in the past seven days ETC has now managed to break the downtrend. Bitcoin was bordering $39k at the time of writing. As Bitcoin had climbed up on its chart, major altcoins followed the same price movement.

Price Analysis: ETC/USD Four Hour Chart
Source: TradingView ETC/USD

At the time of writing, ETC was priced at $28. In the past trading sessions, the coin was seen oscillating between $25 and $27 price levels respectively. Immediate resistance for ETC was at $30.31 and additional resistance marks for the coin stood at $34.22 and then at $38.68.

On the flipside, ETC was resting in the support line of $25.84. For Ethereum Classic to move past the immediate resistance level of $30.31. The coin has to continue to trade above the $28 mark and form higher highs and lows.

ETC hadn’t traded beneath the $28 mark since January 18, the coin’s value dropped as the coin met with an intense sell-off. Over the past week, ETC buying pressure rose slowly and at press time, the asset stood near the overbought zone.

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The Relative Strength Index was parked above the 80-mark, which meant that the asset was overvalued at the time of writing. RSI was last seen hovering around the same level last in the month of November. A push from the buyers can also correct ETC’s prices over the upcoming trading sessions.

On Balance Volume also recovered considerably as OBV had met with an uptick which signalled and volume inflow had increased, which signified bullishness in the market. Awesome Oscillator depicted green signal bars which were seen amplifying at press time.

The technical outlook for Ethereum Classic remained quite optimistic. With continued demand, ETC could soon trade above the immediate resistance mark.

What’s Next For Ethereum Classic
Image Source: TradingView ETC/USD

Ethereum Classic was moving close to the $28 mark, however, in the last few days, ETC witnessed price action around the same area. Fibonacci Retracement was strong at 50% level. A fall from the current price level would push ETC back to $25 and then finally to $22.

A move above the current price level might cause ETC to experience another pullback at $31.80 at the 78.6% Fibonacci level. A major resistance point for ETC lay at $34.55 level, Ethereum Classic last traded at this price mark just a few weeks back in early January.

Strength from the broader crypto market would be required for Ethereum Classic to continue trading in an upward direction. If Bitcoin trades above the $40k mark, then major altcoins could also remain optimistic on their charts.

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