Ethereum Classic Down on Lack of Updates from Developers

Ethereum Classic Down on Lack of Updates from Developers
November 9, 2017

Ethereum Classic (ETC), the original Ethereum chain, has been rising in the past few trading sessions. The ETCUSD pair has gained about four dollars in the past two trading sessions to hit a high of $15.05. As the readers may be well aware of, Ethereum, which is a fork of the Ethereum Classic network, has gained tremendously in 2017, after the big players and multinational corporations started backing it. However, it is not the case with Ethereum Classic, which is perceived to be an insecure orphan chain. Thus, a strong rise in the price of ETC has raised the eyebrows of many investors. As explained below, the appreciation should be used to book profit or go short in the ETCUSD counter as we may see the price going back to pre-rally levels in the days to come.

Aided by a 53.52% jump in volumes on Bithumb, a South Korean exchange, the price of Ethereum Classic rose to an eight week high earlier this week. In fact, nearly $588.50 million worth Ethereum Classic changed hands on Monday. An altcoin will consolidate after a steep rise in price, only when there is a relevant update from the corresponding development community. If there is no update, then the price rise should be construed as a pump and dump scheme. In the case of Ethereum, there is no update from the development community. Thus, we can expect the price to retrace in the days ahead.

Another main reason for the price rise is that the South Korean exchange Bithumb has started offering ETC/KRW pair for trading. That has increased the interest among traders, thereby resulting in an increase in the volume. Thus, it is clear that the current rally in the ETCUSD pair is not driven by fundamental developments.

As far as the Greenback is concerned, the recent non-manufacturing PMI data indicates a strong rebound in the economic activity, following the negative impact of hurricanes Harvey and Irma. Further, the Fed is expected to hike the benchmark interest rate next month during the monetary policy meeting. Finally, the Trump government has started seeing reasonable success in getting the tax reform enacted. All these factors favor a decline in the ETCUSD pair.

The ETCUSD pair has started declining after facing resistance at 14.40. The oscillator of moving average is declining. Further, the pair also moves below its 50-period moving average. Thus, we anticipate the ETCUSD to decline in the short-term.

ETCUSD - Technical Analysis - 9th November 2017

To gain from the downtrend, a put option may be bought from a suitable binary broker. We will enter only if the ETCUSD pair trades at about $14 in the OTC market. Finally, we prefer the option to remain active for at least one week.

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.

Ian Maguire

Ian Maguire

Ian is our resident contributor to the latest going ons in the cryptomarket, keeping up to date with the latest icos and coins

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