Ethereum Classic is up 140% in a month.
The token is retreating with a 14% drop in a week
Messari Analyst Doesn’t Think Ethereum Classic Will Make a Profit
Ethereum Classic ETC/USD is up 140% in a month. The token has risen on the back of the expected merger of parent Ethereum. The merger will see Ethereum move from a proof-of-work to a proof-of-stake blockchain. Investors have expected the shift will allow PoW miners to move to Ethereum Classic.
Messari analyst Tom Dunleavy commented on the latest win in Ethereum Classic. Dunleavy says ETC’s rally won’t last long. He warns that despite the gains, users and volumes have remained unchanged. The analyst also points out that applications on the blockchain do not exist.
Additionally, Dunleavy says the Ethereum merger will not have much of an impact on the Ethereum Classic. According to him, ETH mining accounts for 97% of GPU mining revenue. ETC mining is only 2% and would attract few miners. He estimates that ETC mining would bring in just $700,000 each day for miners. That compares to Ethereum’s $24 million.
Ethereum Classic Slides Supporting a Market Correction
Source – TradingView
Technically, Ethereum Classic has pulled back into a $34 support zone. Bullish momentum is dying despite remaining in an uptrend. We do not recommend buying at the support as momentum is weakening. If ETC falls below $34, the next level is $26.
ETC has risen by triple digits in the past month. The gains have been driven by expected boosts from the Ethereum merger. Analysts blame the gains fueled by hype rather than fundamentals.
Lack of clear fundamentals and a weakening FOMO could lead to further declines in ETC. While investors may benefit from near-term price gains, we believe the $34 support is vulnerable.