Yes, Merge is bullish for Ethereum Classic price, but do you know when to get out?

  • What are the ramifications of the Merge price on Ethereum Classic?
  • ETC experienced a shallow drop on August 2, but the recovery has been faster.
  • A resumption of the rally to $77.33 looks plausible before the meltdown, especially with the appropriate momentum behind the move.
  • A weekly candle close below $25.11 will invalidate the bullish thesis.

Ethereum Classic price is being traded extremely volatile and bullish at this time due to the next Ethereum update: Merge.

In this article, we’ll take a closer look at the ramifications of Merge and the effects of its proposed migration from Proof-of-Work (PoW) to Proof-of-Stake (PoS).

Ethereum vs Ethereum Classic

First, a quick summary of the difference between Ethereum and Ethereum Classic. A hard fork in 2016 led to the split of ETH into two distinct assets: Ethereum (ETH) and Ethereum Classic (ETC). The main difference between the two is that ETC is a speculative digital asset with a fixed supply of 210,700,000. While ETH is the more popular and accepted version that is widely traded, with no fixed supply.

Another difference is that while ETH is planning a much-publicized switch to PoS from PoW, in the merger, ETC intends to keep traditional mining on its own blockchain after Ethereum migrates to PoS.

ETC Price: Before and After the Momentum to Merge

So what can investors expect to happen with the price of Ethereum Classic a few days before and after the big event that is the merger?

Right now, the value is split between the Ethereum main chain and Ethereum Classic, with traders looking to make as much profit as possible using the ETH PoW futures products listed on BitMEX and Poloniex.

Before the implementation of Merge, the ETH chain split into two strings – ETH1 (PoW) and ETH2 (PoS). So let’s take a look at the possible scenarios that could affect ETC holders.

  1. After the merger, investors are likely to unload their ETH1 holdings and buy ETH2 as they believe the PoS will accrue higher value despite the fork.
  2. ETC holders could also do the same and move to ETH2 or, in a limited number of cases, ETH1.
  3. Miners, on the other hand, will be biased towards mining the most profitable chain. Due to the ongoing fight between the Ethereum Foundation and the mines, miners are likely to support ETH1. However, if the price of ETC is high enough and mining is profitable, they could keep ETC.

Regardless of how you look at it, the Ethereum Classic price is likely going to take a big hit. This is confirmed by data from Grayscale, which offers ETC products and has been selling its assets since March 2021.

Grayscale has reduced its ETC exposure from approximately $12.45 million to $11.96 million, denoting a delta of 500,000.

Grayscale ETC Holdings

Ethereum Classic Price Technical Data

What does ETC look like from a technical perspective? What do the charts say about it? Ethereum Classic price has broken out of its falling wedge pattern and is showing strong bullish momentum. the recoil between July 30 and August 2 it only brought it to $33.62, which is the midpoint of the 265% increase seen between June 13 and July 25.

A further spike in bullish momentum could see ETC revisit and flip the range to $52.72 after a 35% rally. Yes this panorama persists, and most likely, the price of Ethereum Classic could reach the double top formation at $77.33.

This move would constitute a 97% upside from the current position and it is likely that ETC could form a local top, at least after collecting the liquidity.

ETC/USDT 1-day chart

ETC/USDT 1-day chart

In conclusion, investors should be prepared to experience massive spikes in volatility and possible drops in the price of Ethereum Classic a day or two before the Merger, which is scheduled for September 19.

One consideration that investors should take into account is whether their investment in ETC is for short-term or long-term speculation. If the latter, after the merger, the Ethereum Classic chain will likely accumulate value, especially if the ETH1 chain fails to take off.

In such a case, ETC has a bullish future, but it is too far in the future with too many variables to predict a probabilistic outcome, let alone a true one.