Ethereum Classic Turn Bullish on Decrease in Block Reward

Ethereum Classic Turn Bullish on Decrease in Block Reward

 
Ethereum Classic (ETC), which is the original Ethereum chain, gained about 50% last week to hit a high of $34. While a majority of investors never saw the spike coming, those who entered at the right time are sitting on huge profits. There was also a section of crypto currency investors who complained the spike as a pump-and-dump game. However, the facts presented below indicate there is a big development going on behind the scene and the uptrend we saw last week may be the beginning of a big rally in the near future.

Theoretically, there is an unlimited supply of Ethereum Classic tokens. As many as 13 million tokens are created each year. That was one of the reasons for the price to remain depressed. However, at the developer conference in Hong Kong, it was announced that a policy to limit the number of tokens will be implemented. The policy aims to make Ethereum Classic token a better store of value. That triggered a rally in the price of Ethereum Classic.

The new policy, referred as ECIP1017, is a protocol upgrade that would permanently alter Ethereum Classic’s supply. The protocol upgrade was completed last month through a hard fork. The ETC block reward is expected to decrease over time and cease to exist when the total coins in circulation reaches approximately 210 million to 230 million. The first reduction in the reward to 4 ETC, from the current level of 5 ETC per block, will occur at block 5,000,000 or on December 12. To sum it up, following the hard fork, ETC has become a deflationary digital currency that will rise in value over time. Almost 90% of the nodes mining ETC support the shift to ECIP1017.

Secondly, as in the case of other crypto currencies, which has seen a sharp rise in the price, volumes traded in the South Korean exchange Bithumb is again the main driver behind the appreciation in the price of Ethereum Classic. Coinone and Korbit are the other two South Korean exchanges, which contributed to an increase in volume. Notably, Bitfinex is the only non-Korean exchange to take the third spot in the list of top four exchanges ranked by 24-hour trading volume. Thus, a strong rise in volumes and a reduction in block reward starting from December 12 is expected to keep the crypto currency bullish.

The ETCUSD pair is trading near major support level of 23.50. Further, the RSI indicator is near the bearish zone. Thus, we expect a continuation of the uptrend. A break above 28.90 will take the crypto coin to new highs.

ETCUSD - Technical Analysis - 7th December 2017

A call option may serve our interests in the best manner. Before investing in a call option, we would like to make sure that the contract offered by a trusted binary broker is valid for one week. Further, the ETCUSD pair should be trading near $23.50 in the crypto market.

Disclaimer: The trading analysis offered here is our opinion. It is not provided as trading advice, merely an indication of our trading plan. We cannot guarantee success and we encourage traders to incorporate a strong money management strategy to limit losses. Please use this article as part of your own research before formulating strategies prior to trading.


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