- Support at $20.00 will determine if ETC price regains momentum above $30.00 or drops to retest $13.50.
- Ethereum Classic mining hashrate continues to drop approximately six weeks from the Merge.
- Based on the Super Trend indicator’s sell signal on the daily chart, sellers have the upper hand.
Ethereum Classic price is trading 51% down from its September peak at $45.81. Market participants were surprised when ETC price more than tripled its value from $13.50, thanks to the departure of miners from the former Ethereum PoW (proof-of-work) protocol. Now Ethereum Classic price banks on support at $20.00 to avert possible declines to $13.50.
Ethereum Classic hashrate slides below a potential equilibrium
The Ethereum Classic hashrate spiked to a new all-time high of 234.35Th/s in the weeks preceding the Merge – an Ethereum software upgrade that saw the blockchain become a PoS (proof-of-stake) protocol.
At the time, miners within the Ethereum ecosystem considered Ethereum Classic a worthy alternative for their mining equipment. However, the trend in the hash rate started to reverse immediately after the Merge went live on September 15.
Ethereum Classic price has also erased more than 50% of the gains accrued between mid-July and mid-August. Although a retracement was expected for the hashrate, many believed it would settle at an equilibrium, say 150Th/s. Now the hash rate has slipped further down to 135.90T/s amid risks of an extended downtrend to 100Th/s.
Hashrate is a measure of the performance of mining hardware dedicated to mining a cryptocurrency. It is calculated using the current network difficulty, the average time set for processing a block of transactions, and the time taken to process the latest blocks.
A higher hashrate suggests that the network is secure. In other words, it shows that more resources are being assigned to the network to process transactions. Moreover, miners and investors alike tend to believe that the network has the potential to grow when the hashrate is increasing. For this reason, the drop in the Ethereum Classic hashrate may indirectly stifle price growth.
Ethereum Classic is in limbo
Ethereum Classic price has since Friday respected support at $20.00 despite its technical outlook screaming sell. If ETC bows to the selling pressure at this position, investors should expect its down leg to retest the primary support at $13.50.
Adding credibility to the possibility of a bearish outcome is a sell signal presented by the Super Trend indicator on August 19. Furthermore, ETC price holds beneath the applied moving averages – the 50-day SMA (Simple Moving Average), red; the 100-day SMA, blue; and the 200-day SMA, purple.
ETC/USD daily chart
The DMI (Directional Movement Index) in the same daily timeframe flaunts another sell signal, with the -DI above the +DI.
On the flip side, upholding support at $20.00 could change Ethereum price’s technical outlook bullishly, with its rebound surpassing $30.00 or even $40.00.