Ethereum Classic: Can these factors trigger this move
Even though Ethereum Classic was down 74.04% from its all-time-high, it was up 15% from its recent low on June 22. At the time of writing, the cryptocurrency was trading just over the $40 mark offering YTD returns of 618.36%.
As opposed to most alts, ETC was one of the few star gainers of Q2 as per a recent report from CoinMetrics. The report reviewed the performance of Bitcoin and altcoins during Q2 2021 and analysts found that even with the sharp May 19 market correction a few assets finished the quarter in the green.
Ethereum Classic (ETC) was the second-best gainer preceded only by Dogecoin, and the former gained a sweeping 297% despite a nearly 39% decline in the price of Bitcoin.
After the last stable release named Thanos in 2020, ETC is geared up towards launching the Magneto hard fork to improve its blockchain network by the end of this month. As of now, Magneto is scheduled for the 21st of July and the same will implement ECIP-1103.
With many suggesting a price hike for the asset by the end of this month the current sentiment according to LunarCrush appeared to be bullish even amid the alt’s recent 25% fall. Most of ETC’s social metrics were leaning towards the bullish side, with the altcoin noting a Galaxy Score of 63 on the charts.
That being said, it is notable that the on-chain metrics and development activity for Ethereum Classic didn’t paint a healthy picture for the alt. ETC’s percent of total stablecoin supply held by whales with more than 5 million USD still oscillated below the May-June levels after slumping towards the end of June. Even though the indicator still held above the pre-May highs, it had been moving sideways for the most part of this month.
The development activity for the alt presented a worrisome picture as it had dropped to lower levels of January 2021. This pointed towards a scanty activity and network development in the space in spite of the upgrades by the network.
A closer look at the ETC price action suggests that it’s currently testing a crucial support level at $40.7. Since the asset is in the oversold zone a triggered recovery could push the asset’s price up. If it bounces off this support level an uptrend could lead to a retest of the $47.6 resistance level. However, a breakdown of the range at a lower, $40 mark will invalidate the bullish thesis.