Ethereum Classic prices rally following hard fork but Grayscale sales signal trouble ahead
Ethereum Classic (ETC) was touted as the second-best gainer in Q2, 2021. At writing time, ETC was trading at $52.91, having hiked roughly 10 percent in the day. The altcoin has been registering gains in 7-days, 14-days, and 30-days charts of 25 percent, 6 percent, and 32 percent respectively. ETC has also increased nearly 700 percent over the year. From a technical point of view, ETC paints a very bullish picture.
After a bullish start to the month, more buyers are likely to flock to the altcoin. ETC could register a further uptrend and likely retest a high of $60. However, Grayscale’s recent trend has triggered panic among some holders. Data from the firm reveals that the investment firm has been dumping its ETC holdings.
More on Ethereum Classic outlook
With its development history, many ETC proponents predict more bullish projections for the altcoin. Nevertheless, on-chain metrics seem to suggest the opposite. For instance, the altcoin’s development activity was on a downtrend with levels last seen in January 2021. Prevailing market sentiments are also bearish, according to LunarCrush. Furthermore, the number of active addresses and 24-hours transactions on ETC dipped below May’s levels.
Additionally, the crypto investment giant Grayscale has for the past four months, been dumping its ETC holdings. In the past month, the firm has sold 28,382 ETC, cutting down its holdings from 12.54 million to 12.32 million. Such actions show quite a bearish outlook for ETC.
Initially, Grayscale supported ETC and even produced an investment thesis projecting ETC’s eight-fold growth to $125.40. ETC achieved and surpassed this mark point, hitting an all-time high of $179.83 during the recent bull run.
ETC recent upgrade
Recently, Ethereum Classic announced via its Twitter, a successful hard-fork activation. Dubbed “Magneto”, the update was first mentioned on June 11, raising hopes for an ETC resultant price hike. More so, a price uptick was expected as Ethereum’s top developer Vitalik Buterin is a proud validator of ETC.
Activated at block 13,189,133, the hard fork comprised of Ethereum Improvement Proposals (EIPs) in Ethereum’s Berlin upgrade early this year. Magneto’s developers noted that the hash-rate is stable, and majority of the nodes along major service providers are updated. Prominent exchanges, such as Binance, also supported the hard fork.
The upgrade provides the much needed extra network security, cost-efficiency and low energy, among other benefits. Its yields are the result of months of multiple testnet experimentation and optimization.
Since the announcement of this upgrade on July 24, ETC has rallied 24 percent. While the recent news and bullish prognosis are sensible, things could go left for ETC should the pullback extend below $45.
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