- Ethereum Classic price went parabolic on Wednesday.
- It surged to the highest point since December 16.
Ethereum Classic price woke up from a long slumber on Wednesday. ETC surged to a high of $18.33, which was the highest point since December 16. It has popped by more than 23% from the lowest level in 2022.
Why did ETC price jump?
It is not clear why Ethereum Classic price went parabolic. A possible reason is that the coin jumped as investors anticipate a regulatory crackdown of Ethereum later this year. As you recall, Ethereum went through a major overhaul in 2022 that shifted it from a proof-of-work (PoW) network into a proof-of-stake (PoS). This transition was known as The Merge.
The Merge was an important part of Ethereum’s transition. For one, it set the stage for other upgrades in the coming years. The first important one is the upcoming Shanghai upgrade that will allow people to withdraw their staked asses. It will also introduce upgrades like sharding that will make it much faster. Other main upgrades are The Surge, the Scourge, The Verge, The Purge, and the Splurge.
Find out how to buy Ethereum Classic.
All these upgrades are expected to make Ethereum a better and faster platform. However, the staking features mean that Ethereum will be exposed to regulatory scrutiny, especially in the United States. The SEC now believes that Ethereum has shifted into a financial security.
Therefore, Ethereum Classic price likely rallied in anticipation of these challenges. Some analysts believe that it could benefit since it was created from an Ethereum hard for in 2017. We saw ETC price surge before the Merge happened.
Another possible reason for the rally is that this is a short squeeze. A short squeeze happens when investors push up a financial asset that is heavily shorted. Recent data shows that ETC is highly shorted as investors worry about its weak ecosystem.
Ethereum Classic price prediction
The 4H chart shows that Ethereum Classic price went vertical on Wednesday. Before its rebound, the coin had formed an inverted head and shoulders pattern. In price action analysis, this pattern is usually a bullish sign. It had also formed a double-bottom pattern at $14.85 whose neckline was at $16.77.
ETC price moved above the 25-day and 50-day moving averages and retested the important resistance point at $18.40, the lowest level on November 28. Oscillators like the Relative Strength Index (RSI) and the MACD moved to the overbought level.
Therefore, the coin will likely pull back in the coming days as the bullish momentum wanes. If this happens, the key level to watch will be at $16.77.
Contributors
