Ethereum Classic risks further downside despite being down significantly from its all time high. Contrary to popular sentiment, ETC/USD declined below $5 and continued its fall all the way towards $3. The number of people who believe the price can fall a lot further is now at an all time high shown by the rising number of ETCUSDShorts. This belief is strengthened by the recent shutdown of ETC Dev, a major development company that helped bring Ethereum Classic (ETC) to the limelight after the Ethereum (ETH) hard fork. When ETC Dev announced its shutdown, a vast majority of cryptocurrency investors and analysts were quick to react by declaring that Ethereum Classic (ETC) is officially dead.
It is possible that the ETC Dev shutdown helped bring about the decline to $3 considering Ethereum Classic (ETC) had previously done a good job defending against a fall below $4. That being said, as we have seen in the past, such fundamental catalysts often finish the job delivering what the charts already show us. ETC/USD was poised for another fall which the ETC Dev shutdown delivered. Ethereum Classic (ETC) is currently trading close to $4 again but considering that Bitcoin (BTC) is expected to fall further, it would not be surprising to see Ethereum Classic (ETC) forming a new yearly low. The price is likely to retrace as shown by the ETC/USD chart.
Chart for ETC/BTC (1W)
Ethereum Classic (ETC) is expected to continue trading to the top of the descending channel but that is unlikely to happen before a retest of the yearly low. If Bitcoin (BTC) falls to $3,000 then we may expect the price to fall below $3. That being said, the price is now at the bottom of the channel and there is very little room for further downside. Ethereum Classic (ETC) is extremely unlikely to break below this descending channel which means it only reasonable to expect the price to correct to the upside in the weeks ahead. The near term correction is likely to propel Ethereum Classic (ETC) towards $9. However, the chances of another correction in early 2019 continue to loom over.
The current state of the altcoin market points to a mini alt season in mid 2019. This is going to see cryptocurrencies like Ethereum Classic (ETC) rise by at least 500% from current levels. While the risks of further downside remain short term, it is pertinent to note that smart money is busy accumulating at these levels for the long term. Ethereum Classic (ETC) at current prices points to two possible scenarios: either it is about to die or it is about to come to life. Considering that ETC Labs is funding startups left and right to build on the Ethereum Classic (ETC) blockchain, chances are they are just getting started.
Source: Crypto Daily