Ethereum Classic

Charles Hoskinson and Ethereum dev get into a war of words post-Vasil upgrade

Hoskinson called the Ethereum Merge a flawed PoS implementation, claiming custodial staking would create issues for the network in the long run.

Charles Hoskinson, founder of Cardano and co-founder of Ethereum, got into a war of words with Ethereum developers on the implementation of the proof-of-stake (PoS) consensus via the Ethereum Merge.

On Sunday, Web3 investor Evan Van Ness shared an unpopular opinion, claiming that the Ethereum Merge could have been shipped earlier. Vitalik Buterin, co-founder of Ethereum, agreed with Van Ness’s comments and said they should have implemented an NXT-like chain-based PoS consensus.

Hoskinson joined in the conversation, claiming Ethereum developers should have implemented the Snow White protocol to ensure a faster migration to PoS.

Snow White, a protocol Hoskinson has advocated for years, is one of the first protocols to provide end-to-end, formal proofs of security for a PoS system. But Hoskinson’s response opened a can of worms, which later led to a heated debate between the Cardano founder and Van Ness, along with other Ethereum developers

Hoskinson claimed that his ideas regarding the technical upgrades on the Ethereum network from 2014 still hold better than what the Ethereum network has upgraded to post Merge. Van Ness quickly reminded Hoskinson that he was fired from Ethereum within six months because of his poor behavior and lack of any significant technical contribution.

Related: Cardano Vasil upgrade ready with all ‘critical mass indicators’ achieved

Earlier on Monday, Hoskinson, in a Twitter thread, accused Ethereum developers of ignoring Ouroboros  — a secure PoS blockchain and the first protocol to be based on peer-reviewed research — throughout the last five years. He also claimed that the current version of its PoS upgrade with custodial staking is a bad design.

Ethereum core developer Hudson Jameson called out Hoskinson’s claims regarding the Ouroboros protocol implementation. He even said that Ethereum devs disliked Cardano primarily because of his “attitude and actions as the face of Cardano.”

Jameson then reminded Hoskinson of his poor treatment of the Ethereum Classic community and asked him to quit playing the victim.

Hoskinson is known for his hot takes on his former project, and the war of words between the two communities is nothing new. However, with both blockchains undergoing key upgrades on their networks, the recent exchange between the two sides highlights the disconnect between blockchain communities.

Ethereum post-Merge hard forks are here: Now what?

The Merge marks a turning point for the Ethereum network, but what are the consequences of switching to a new consensus mechanism?

On the first day after the Merge, the decentralized finance (DeFi) community is settling into the seemingly uneventful transition of the Ethereum network from proof-of-work (PoW) to proof-of-stake (PoS). However, it has yet to be seen the benefits that hard forks will bring to PoW supporters.

So far, the most important contending networks in favor of the mining community, EthereumPoW and Ethereum Classic, have shown different outcomes post-Merge.

A stumbling start

The fledgling EthereumPoW started its debut with Twitter users reporting issues with accessing the network. The issues were confirmed to be the result of a hack to the network but was reportedly resolved.

Major cryptocurrency exchange OKX has already started providing on-chain data for the new network. Though the current transaction activity of the crypto asset seems stable, the PoW spin-off’s price value has been in constant decay since its launch, going from a price of $137 at its peak to $5.87 at publishing time, according to CoinMarketCap.

Moving forward, there is no clear infrastructure or roadmap plan for the ETHPoW network. The project’s “meme” white paper, displayed on its website, is 10 pages long, with five of them solely dedicated to the title of the project and the remaining five “intentionally left blank.” The prank document is also accompanied by a GitHub repository with merely 16 contributions since August this year, and no further information is provided on the section of EthereumPoW official documents.

ETC’s revival

The cryptocurrency Ethereum Classic (ETC) could see a turnaround in its struggle to lift off, as the community could shift to the six-year-old project.

Originally created in 2016, the existence of Ethereum Classic is the result of one of the biggest philosophical divisions in the Ethereum community. The fork originated as a solution to the hack of The DAO, a project executing on the Ethereum network.

The DAO was an early iteration of a decentralized autonomous organization (DAO) on the Ethereum network. To address the hack and compensate investors, the community agreed to essentially roll back the network’s history to before the hack happened with a hard fork. While the new fork inherited the name “Ethereum,” those who disagreed with the move continued to support the old fork, which became known as Ethereum Classic.

Today, Ethereum Classic works as an open-source blockchain that runs smart contracts with its own cryptocurrency.

The preference for ETC over other fork options goes beyond its market price, already submitted to various ups and downs, but rather a matter of practicality. Sebastian Nill, ETC miner and chief operations officer of mining consulting company AETERNAM, told Cointelegraph that, since it runs using a PoW consensus protocol, it is more attractive for the mining community, adding:

“The possibility of a hardfork has always been there. People are always going to prefer to be able to mine Ether rather than having to buy it.”

As the network is a fork of Ethereum, meaning everything the main network had can be replicated on its hard fork, that doesn’t imply that the possibility of building products and services on top of the ETC’s chain would be the main interest for the community. 

The cryptoasset could also absorb most of the energy consumption left by Ethereum to apply on their own proof-of-work, allowing the network to confirm transactions and maintain its security with an important amount of energy resources.

“Ethereum Classic is going to be just as effective as Ethereum was for miners. In the end, the community is going to pick ETC, not because of its rentability but for effectiveness for data processing,” Nill says.

The user perspective

The users that decide to hold Ethereum PoW or any subsequent token post-Merge could find it difficult to trade their new assets. The support for operations with the fork-resulting asset from major exchanges like Binance is a current relief for holders who still face the asset’s decay in value.

Moreover, another concern that could be in sight is the one coming from the regulation front. In a recent commentary given to Wall Street Journal reporters on Thursday, the United States Securities and Exchange Commission chairman Gary Gensler reportedly said that cryptocurrencies and intermediaries that allowed staking could be defined as a security.

The regulatory attention toward Ethereum resulting from a PoW to PoS transition could be a game changer that effectively fits the U.S. law. This is due to the possibility of staked assets to generate dividends and be seen as securities according to the Howey test.

On the other hand, while Ethereum’s upcoming PoS model is more energy efficient and environmentally friendly, the upgrade hasn’t cured the current headaches for DeFi protocols and its users, like network congestion and high transaction fees, known as gas fees. For instance, the first nonfungible token (NFT) to be minted post-Merge cost over $60,000 in gas fees.

The building of strong foundations over providing lower gas fees and major transaction speed is a temporary tradeoff that won’t affect the market, as Matt Weller, global head of research of City Index, told Cointelegraph:

“From a user perspective, you want something that is cheap, fast and reliable. Through the Merge and more scaling in future plans for the Ethereum Foundation, this could be a foreseeable opportunity. They have worked from a very safe place, assuring security at all cost over other tradeoffs.” 

No shortcuts

Ethereum’s choice to bet on a change for its consensus protocol has been defended as a necessary, non-negotiable step. 

Skylar Weaver, devcon and devconnect lead of the Ethereum Foundation, told Cointelegraph that the Merge is a testament to the network’s “no shortcuts” approach to its development:

“No, I don’t think it is a trade-off. I see PoS as a necessary step to achieve those user-focused perks, like transaction speed and lower gas fees. Other chains achieve lower gas fees and faster transaction speeds indeed by making tradeoffs: They sacrifice decentralization to have more scalability. They take shortcuts.” 

Moreover, the usage of rollups through layer-2 networks will still allow access to Ethereum’s benefits for mainstream users.

“Ethereum is scaling right now via L2s. Specifically rollups. Folks can use Rollups today to have transactions with a fraction of the gas cost, faster, while still inheriting the security and decentralization benefits of Ethereum. That’s how we are scaling without taking shortcuts.” Weaver said.

Does Ethereum’s new ETHPoW fork stand a chance? ETHW price falls 65% post-Merge

Nonetheless, ETHPoW is gaining adoption among top mining pools and crypto exchanges.

ETHPoW, a separatist proof-of-work (PoW) blockchain forked from Ethereum’s Merge, went live on Sept. 15. However, the chain suffered technical issues after the launch, which put downward pressure on its ETHW token. 

ETHW price down 65% amid “ChainID” fiasco

The price of ETHW has dropped by 65% since ETHPoW’s launch to around $14 on Sept. 16, according to CoinMarketCap. At its lowest, the token was changing hands for $9.50.

ETHW price performance in the past seven days. Source: CoinMarketCap

The losses coincided with a technical issue related to ETHPoW’s ChainID.

ChainIDs are identifiers that help users identify one blockchain from another. Thus, ETHPoW required a new ChainID to separate its transaction data from the original Ethereum blockchain after the Merge, otherwise, it risked creating duplicate transactions.

The team behind ETHPoW announced on Sept. 15 that its unique ChainID is 10001. However, data from Chainlist shows that a cryptocurrency project called Smart Bitcoin Cash, operating under the ticker BCHT, has the same ID. This issue resulted in errors on the MetaMask cryptocurrency wallet.

The ETHPoW recognized the issue and adjusted the ChainID later on Sept. 15. However, several miners appeared to have pulled out despite a few major pools continuing to mine the PoW chain.

Notably, the ETHPoW hash rate fell to 66.64 TH/s on Sept. 16 after peaking at 80.56 TH/s earlier in the day.

ETHPoW hashrate as of Sept. 16, 2022. Source: 2miners.com

In comparison, the hash rate of Ethereum Classic (ETC), another PoW alternative for Ethereum miners, was 234.56 TH/s on Sept. 16 versus its peak near 310.5 TH/s the day before.

ETHW listed on some exchanges despite concerns

Eric Wall, the chief investment officer at cryptocurrency investment firm Arcane Assets, noted that ETHPoW miners could not sustain the chain at current ETHW prices. He explained:

“The daily rewards are 13100 ETH, $354k instead of $20m. There is no way miners can just “keep mining” the ETHPoW chain, no matter how you adjust the difficulty. There simply aren’t enough rewards in the system to pay for the electricity bills.”

Related: Dogecoin becomes second largest PoW cryptocurrency

Nevertheless, ETHW was listed at some leading cryptocurrency exchanges, including FTX and Huobi. In addition, BitTrue has also introduced an ETHW-based liquidity staking service that offers depositors a 6% annual return.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Ethereum Classic books 12% rally as mining support for ETC gains pace

ETC price secures a double-digit gain as its hashrate hits a record-high and BTC.com adds a Ethereum Classic mining option to its services.

Ethereum Classic (ETC) price rallied on Sept. 5 on back-to-back positive reports concerning its adoption among crypto miners.

Top mining pool supports Ethereum Classic

On the daily chart, ETC’s price surged 14.5% to nearly $37.25 per token. Its massive gains came days after BTC.com, a blockchain explorer and crypto mining pool, launched a specialized Ethereum Classic pool with “zero-fee” mining for three months.

ETC/USD daily price chart. Source: TradingView

The announcement appeared after “the Merge,” a long-awaited network update that would switch Ethereum’s energy-intensive proof-of-work (PoW) protocol to a “cost-efficient” and scalable alternative, the proof-of-stake (PoS), on Sept. 19 or before.

But the switch to PoS will make Ethereum’s PoW miners futile. On the other hand, Ethereum Classic, the original version of Ethereum, which still uses PoW, could become a haven for the miners affected by the Merge.

The network is already attracting PoW miners en masse, confirmed by its hashrate, which touched a record high of 41.81 Terrahash per second (TH/s) on Sept. 4. For the unversed, hashrate is the total computational power used to mine and process transactions on a PoW blockchain.

Ethereum Classic hashrate. Source: CoinWarz

This migration has helped ETC rally incredibly in recent months; it is up 200% since mid June.

ETC price could rise another 60%

From a technical perspective, Ethereum Classic looks ready to undergo a circa 60% price rally in September.

Notably, ETC’s price has formed a “bull flag” in recent weeks. Bull flags appear when the price consolidates lower after a strong uptrend. Meanwhile, they resolve after the price breaks out in the direction of its previous trend and are thus considered bullish continuation patterns.

As of Sept. 5, ETC tested its bull flag’s upper trendline for a potential breakout move. Suppose the token does it. Then, its likelihood of rising further will be higher. Also, as a rule of technical analysis, the price could rise by as much as the previous uptrend’s length, as shown below.

ETC/USD daily price chart featuring ‘bull flag’ breakout setup. Source: TradingView

In other words, the ETC bull flag’s profit target comes to be at around $58.50, up almost 60% from Sept. 5’s price.

Related: ETH Merge: CoinGecko co-founder shares strategy for forked tokens

Conversely, a decisive break below the bull flag’s lower trendline risks invalidating the upside setup explained above.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Australian regulators rattle their saber as adoption takes a major leap: Law Decoded, Aug. 22–29

The ASIC prepares to put crypto and DeFi firmly in its sights, while Australia’s Northern Territory Racing Commission is preparing to adopt cryptocurrencies in gambling.

Australia’s financial regulator, the Securities and Investments Commission (ASIC), has pledged to put crypto assets and decentralized finance (DeFi) firmly in its sights over the next four years. The regulator intends to focus on “digitally enabled misconducts” and to protect investors “from harms posed by crypto-assets.” Given the ASIC’s history of anti-crypto sentiments, such an announcement could be perceived as hostile, but at least it contains a promise to implement some regulatory framework that is still absent. 

And it is hardly a coincidence that the announcement came only days after Australia’s new ruling government announced plans to move forward with regulation of the crypto sector by conducting a “token mapping” exercise by the end of the year.

At the same time, Australia’s Northern Territory Racing Commission (NTRC) is preparing to adopt cryptocurrencies as a wagering option. The NTRC has sent a private document out to licensees, which seeks input and feedback on what the regulatory landscape could look like to get crypto wagering off the ground in the Northern Territory. Should this go according to plan in the Northern Territory, other state gambling regulators would likely follow.

No “free coins” without taxation in South Korea

The South Korean Ministry of Strategy and Finance cleared that virtual asset airdrops, staking rewards, and hard forked tokens would be subject to a gift tax under the Inheritance and Gift Tax Act despite the postponement of crypto gains tax to 2025. Any free virtual asset transfer by crypto exchanges in the form of airdrops, staking rewards and hard-forked tokens would attract a gift tax, which will be “levied on the third party to whom the virtual asset is transferred free of charge.”

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MakerDAO has no choice but to prepare to free-float Dai 

MakerDAO co-founder Rune Christensen reached out to the community explaining why free-floating Dai may be the only choice for the decentralized autonomous organization. “Physical crackdown against crypto can occur with no advance notice and with no possibility of recovery even for legitimate innocent users. This violates two core assumptions that we used to understand RWA risk, making the authoritarian threat a lot more serious,” he stated. 

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Ethereum community splits over solutions for transaction censorship

In the wake of the United States government sanctions on Tornado Cash-linked addresses, the Ethereum community gets divided over how to best respond to the threat of protocol-level transaction censorship. Over the last week, Ethereum community members have proposed social slashing or even a user-activated soft fork as possible responses to transaction-level censorship on Ethereum, with some calling it a “trap” that will do more harm than good and others stating its necessary to provide “credible neutrality and censorship resistance properties” on Ethereum. The heated debate comes after Ethereum miner Ethermine elected not to process transactions from the now U.S.-sanctioned Ethereum-based privacy tool Tornado Cash.

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EthereumPoW team plans to freeze selected contracts, community pushes back

A PoW hard fork of Ethereum is being propagated by a set of miners, but many experts believe that the chances of it succeeding are very low.

Ethereum is all set to transition to a proof-of-stake (PoS) network by Sept. 15 to 16, which will see the end of its current proof-of-work (PoW) consensus mechani and eliminate mining from the ecosystem.

In light of such a significant upgrade, Ethereum’s PoW proponents, especially its miners, have decided to keep the PoW chain alive. EthereumPoW, comprising the core PoW team, has recommended that Ether (ETH) holders withdraw their assets from liquidity pools (LPs) at places such as Uniswap, SushiSwap, Aave, Compound and other decentralized exchanges (DEXs).

The core team said they would temporarily freeze EthereumPoW (ETHW) tokens in certain liquidy pools of DEXs and lending protocols to protect user assets after the hard fork.

The core team believes that immediately after the Ethereum PoW hard fork, especially for the first several blocks, users’ ETHW tokens deposited in liquidity pools will be swapped or lent out by hackers and scientists using deprecated and valueless Tether (USDT), USD Coin (USDC) and Wrapped Bitcoin (WBTC), which would “create a huge mess to the whole network and community.”

The core team said:

“ETHW Core has to make the hard decision to temporarily freeze certain LP contracts to protect users’ ETHW tokens until the protocols’ controllers or communities find a better way.”

The team also said freezing would not be applied to the staking contracts that only involve a single asset, such as the Ethereum 2.0 deposit contract and Wrapped Ether (WETH).

The idea of freezing users’ assets without their consent didn’t go well with many in the community. One user reminded the core team that “freezing hardcoded LP smart contracts into the ETH clients is definitively not decentralized.”

Others went as far as to call it a scam and recommended reporting the Twitter account claiming to be the core EthereumPoW team.

The PoW hard fork has also found support from a prominent Chinese miner, Chandler Guo, who claims to be behind a 51% attack on Ethereum Classic.

The majority of crypto exchanges and stablecoin issuers have thrown their support behind the upcoming PoS-based Ethereum network. However, various crypto exchanges have stated that if a forked PoW chain gains traction, they would be in favor of listing the forked token as well, depending on the demand from the community.

The ETH mining sector is worth $19 billion, according to an estimate from crypto analytics firm Messari. With billions of dollars of infrastructure on the line, it’s understandable why miners would favor a hard fork, given that mining other PoW tokens such as Ethereum Classic (ETC) or Bitcoin (BTC) won’t be as profitable.

Related: Ethereum devs confirm the perpetual date for The Merge

Experts believe a forked PoW Ethereum chain won’t be as profitable either, as most of the community will shift to the new network. Kent Barton, tokenomics lead at ShapeShift DAO, told Cointelegraph:

“While the free market will ultimately decide, it’s likely that following some initial price discovery (and a potential opportunity to sell these forked tokens), these PoW forks will die off. A strategy that’s more likely to succeed is mining on other PoW chains such as Ethereum Classic.”

Ethereum co-founder Vitalik Buterin has been critical of the PoW fork as well, calling it an act of greed from a few outsiders. He recommended miners shift to Ethereum Classic as well.

What will cryptocurrency market look like in 2027? Here are 5 predictions

One year isn’t enough time to witness many fundamental changes, but five years is just enough for everything to change.

The year is 2027. It’s a time of great innovation and technological advancement, but also a time of chaos. What will the crypto market look like in 2027? (For those unfamiliar, that’s a line from the 2011 video game, Deus Ex.)

Long-term predictions are notoriously difficult to make, but they are good thought experiments. One year is too short a period for fundamental changes, but five years is just enough for everything to change.

Here are the most unexpected and outrageous events that could happen over the next five years.

1. The metaverse will not rise

The metaverse is a hot topic, but most people do not have even the slightest idea of what it actually comprises. The metaverse is a holistic virtual world that exists on an ongoing basis (without pauses or resets), works in real-time, accommodates any number of users, has its own economy, is created by the participants themselves, and is characterized by unprecedented interoperability. A variety of applications could (in theory) be integrated into the metaverse, including games, video-conferencing applications, services for issuing driver’s licenses — anything.

This definition makes it clear the metaverse is not such a novel phenomenon. Games and social networks that include most of the features stated above have been around for quite some time. Granted, interoperability is a problem that needs to be addressed seriously. It would have been a very useful feature to be able to easily transfer digital assets between games — or a digital identity — without being tethered to a specific platform.

But the metaverse will never be able to cater to every need. There is no reason to include some services in the metaverse at all. Some services will remain isolated due to the unwillingness of their operators to surrender control over them.

And there is also the technical aspect to take into account. The cyberpunk culture of the 1980s and 90s postulated that the metaverse meant total immersion. Such immersion is now conceived as possible only with the use of virtual reality glasses. VR hardware is getting better every year, but it’s not what we expected. VR remains a niche phenomenon even among hardcore gamers. The vast majority of ordinary people will never put on such glasses for the sake of calling their grandmother or selling some crypto on an exchange.

True immersion requires a technological breakthrough like smart contact lenses or Neuralink. It is highly unlikely those technologies will be widely used five years from now.

2. Wallets will become “super apps”

An active decentralized finance (DeFi) user is forced to deal with dozens of protocols these days. Wallets, interfaces, exchanges, bridges, loan protocols — there are hundreds of them, and they are growing daily. Having to live with such an array of technologies is inconvenient even for advanced users. As for the prospects of mass adoption, such a state of affairs is all the more unacceptable.

For the ordinary user, it is ideal when a maximum number of services can be accessed through a limited number of universal applications. The optimal choice is when they are integrated right into their wallet. Storing, exchanging, transferring to other networks, staking — why bother visiting dozens of different sites for accessing such services if all the necessary operations can be carried out using a single interface?

Users don’t care which exchange or bridge they use. They are only concerned about security, speed and low fees. A significant number of DeFi protocols will eventually turn into back-ends that cater to popular wallets and interfaces.

3. Bitcoin will become a unit of account on par with the U.S. dollar or Euro

Money has three main roles — acting as a means of payment, as a store of value and as a unit of account. Many cryptocurrencies, primarily stablecoins, are used as a means of payment. Bitcoin (BTC) and — to a much lesser extent — Ether (ETH) are used as stores of value among cryptocurrencies. But the United States dollar remains the main unit of account in the world. Everything is valued in dollars, including Bitcoin.

The real victory for sound money will be heralded when cryptocurrencies take over the role of a unit of account. Bitcoin is currently the main candidate for this role. Such a victory will signify a major mental shift.

What needs to happen in the next five years to make this a possibility?

A sharp drop in the confidence vested in the U.S. dollar and euro is a prerequisite for cryptocurrencies to take on the role of a basic unit of account. Western authorities have already done a lot to undermine said confidence by printing trillions of dollars in fiat money, allowing abnormally high inflation to spiral, freezing hundreds of billions of a sovereign country’s reserves, and so on. This may be just the beginning.

What if actual inflation becomes much worse than projected? What if the economic crisis is protracted? What if a new epidemic breaks out? What if the conflict in Ukraine spills into neighboring countries? All of these are feasible scenarios. Some are extreme, of course — but they are possible.

4. At least half of the top 50 cryptocurrencies will see their standing decline

There is a high probability that the list of top cryptocurrencies will radically change. Outright zombies such as Ethereum Classic (ETC) will be ousted from the list, and projects that now seem to hold unshakable positions will not only be de-throned but may also vanish altogether.

RELATED: 6 Questions for Lisa Fridman of Quadrata

Some stablecoins will surely sink. New ones will take their place. Cardano (ADA) will slide down the list to officially become a living corpse. The project is moving agonizingly slowly. Developers not only fail to see this as problematic but even seem to view it as a benefit.

5. The crypto market will fragment along geographic lines

Cryptocurrencies are global by default, but they are not invulnerable to the influence of individual states. The state always has an edge and an extra trick up its sleeve. A number of territories (the U.S., the European Union, China, India, Russia, etc.) have already introduced or are threatening to introduce strict regulation of cryptocurrencies.

The factor of international competition is superimposed onto internal state motivations. When Russia was heavily sanctioned, some crypto projects started restricting Russian users from accessing their services or even blocking their funds. This scenario may play out again in the future with respect to China.

RELATED: Is there a way for the crypto sector to avoid Bitcoin’s halving-related bear markets?

It is not difficult to imagine a future in which parts of the crypto market will work in favor of some countries while closing to others. We are living in such a future already, at least to some degree.

The opinions expressed are the author’s alone and do not necessarily reflect the views of Cointelegraph. This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice.

Ethereum Classic gets ‘endorsement’ from Vitalik Buterin, but ETC price still risks 50% crash

ETC’s ongoing price rebound looks eerily similar to a bull trap event from 2021.

Ethereum Classic (ETC) continues to reap benefits from its blockchain rival Ethereum’s upcoming transition from proof-of-work (PoW) to proof-of-stake (PoS). 

Vitalik Buterin likes Ethereum Classic

Notably, ETC’s price jumped by a little over 20% to reach $27.50, two days after Ethereum co-founder Vitalik Buterin’s endorsement of Ethereum Classic went viral across social media. In his comments, Buterin presented the chain as a “fine” PoW alternative to Ethereum.

The statements appeared amid fears that Ethereum’s potential network upgrade this September will force PoW miners elsewhere. 

In other words, they would be looking for alternative PoW networks to ensure that their rigs remain functional. That could benefit Ethereum Classic since it’s the original version of Ethereum and could therefore ensure an easy migration for miners.

ETC technical outlook

Impressively, ETC price has rebounded by over 120% since mid June, making it the standout performer over the past month. Nonetheless, it is still down over 85% versus its May 2021 record high of $185, suggesting that its ongoing retracement move could technically be a bull trap.

A convincing piece of evidence comes from ETC’s 150% price rebound between June 2021 and September 2021, which became a false recovery signal.

Interestingly, ETC’s ongoing price action appears similar to the one in 2021, as illustrated in the daily chart below.

ETC/USD daily price chart. Source: TradingView

Like in 2021, ETC this year has been consolidating inside the range defined by its 0.236 Fib line (~$28.50) as support and 0.382 Fib line (~$22.80) as resistance. Similarly, the token’s daily relative strength has been correcting from its “overbought” area during the price consolidation.

Related: This little-known DeFi crypto token has rallied over 800% in a month

Therefore, ETC could continue trending sideways in the $22.80–$28.50 price range, followed by a breakdown toward the 0 Fib line near $13.65.

In other words, a 50% price drop from July ‘s price.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Ethereum Classic soars 100% in nine days outperforming ETH as ‘the Merge’ approaches

Ethereum’s transition to proof-of-stake could be a boon for the price of Ethereum Classic.

Ethereum Classic (ETC) has been outperforming its arch-rival Ethereum’s native token Ether (ETH) during the current crypto market rebound with the ETC/ETH pairs at 10-month highs.

Why is ETC beating ETH?

ETC’s price has risen to $27 on July 22, amounting to a 100% gain in nine days after bottoming out at $13.35. Comparatively, ETH’s price has seen a 64% rally in U.S. dollar terms.

ETC/USD versus ETH/USD daily price chart. Source: TradingView

Ethereum’s rebound has been among the sharpest among the top cryptocurrencies, primarily due to the euphoria surrounding its potential network upgrade in September.

Dubbed “the Merge,” the long-awaited technical update will switch Ethereum from proof-of-work (PoW) to proof-of-stake (PoS).

Moreover, it will replace miners with stakers. As a result, the PoS switch could force existing Ethereum miners to switch to PoW chains.

Unsurprisingly, Ethereum Classic is the closest to Ethereum in terms of network design and compatibility because Ethereum Classic is the legacy chain split from Ethereum following a contentious hard fork in July 2016. 

Speculators are thus anticipating Ethereum Classic to become the first choice for miners migrating from Ethereum, and this is likely one of the main reasons ETC’s recent price surge. 

ETC price technicals lean short-term bearish

From a technical standpoint, Ethereum Classic has been reeling under the pressure of its 200-day exponential moving average (200-day EMA; the blue wave in the chart below) near $27.35.

ETC/USD daily price chart. Source: TradingView

ETC/USD has witnessed a strong bearish rejection near the wave resistance on July 19, confirmed by the largest spike in its daily trading volume in almost a year. In addition, the rejection came after testing the 0.382 Fib line at around $27.47 as resistance.

Related: All ‘Ethereum killers’ will fail: Blockdaemon’s Freddy Zwanzger

ETC now consolidates inside the $22–$25 price range with its interim bias skewed toward the downside due to an “overbought” relative strength index (RSI).

ETC eyes a decline toward its 50-day EMA (the red wave) near $19 if it decisively breaks below $22—over 25% lower than July 22’s price.

Conversely, a successful break above $25 and the 200-day EMA could have ETC’s price rally over $30.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Top 5 cryptocurrencies to watch this week: BTC, ETH, MATIC, FTT, ETC

Bitcoin’s attempt to form a bottom has lured altcoin traders to focus on ETH, MATIC, FTT and ETC.

The United States equities markets recovered from their intra-week lows last week, suggesting demand exists at lower levels. On similar lines, Bitcoin (BTC) also recovered from $18,910 last week, indicating that traders may be getting back into risky assets. 

However, analysts remain divided in their opinion on the recovery of Bitcoin. While some believe that the relief rally is a bull trap, others expect the up-move to retest the crucial resistance at the 200-week moving average of $22,626.

Crypto market data daily view. Source: Coin360

The current bear phase has damaged sentiment as seen from the Crypto Fear and Greed Index, which has remained in the “extreme fear” zone since May 6. According to Philip Swift, creator of on-chain analytics platform LookIntoBitcoin, the time spent in the “extreme fear” category is longer than during the 2018 Bitcoin bear market.

Could the sentiment stage a turn around boosting crypto prices higher? Let’s study the charts of the top-5 cryptocurrencies to identify potential breakout assets.

BTC/USDT

Bitcoin rose above the 20-day exponential moving average (EMA) of $20,894 on July 15, but the bulls have not been able to build upon this advantage. The bears are likely to defend the resistance line of the symmetrical triangle with vigor.

BTC/USDT daily chart. Source: TradingView

The 20-day EMA has flattened out and the relative strength index (RSI) has risen close to the midpoint. This suggests a balance between supply and demand.

The first sign of strength will be a break and close above the 50-day simple moving average (SMA) of $23,445. That could clear the path for a possible rally to the pattern target at $28,171. Such a move will suggest that the BTC/Tether (USDT) pair may have bottomed out at $17,622.

Alternatively, if the price turns down and breaks below the 20-day EMA, the pair could extend its stay inside the triangle for a few more days. The price action inside the triangle is likely to be random and volatile. A break and close below the triangle could signal that bears are back in the driver’s seat.

BTC/USDT 4-hour chart. Source: TradingView

The moving averages have been crisscrossing each other for some time, indicating a range formation. The bears will try to pull the price below the moving averages. If they manage to do that, the pair could decline to $20,000. A break below this support could open the doors for a possible drop to the support line.

On the other hand, if the price rebounds off the moving averages, it will suggest that bulls are buying on dips. That could improve the prospects of a breakout from the triangle. The pair could then rally to the overhead resistance at $23,363.

ETH/USDT

Ether (ETH) completed an ascending triangle pattern when bulls pushed the price above $1,280 on July 16. The bears are currently trying to pull the price back below the breakout level and trap the aggressive bulls.

ETH/USDT daily chart. Source: TradingView

The critical level to watch on the downside is $1,280. If the price rebounds off this level, it will suggest that bulls have flipped $1,280 into support. That could improve the prospects of the resumption of the up-move. The ETH/USDT pair could then rise to $1,700, where the bears may again pose a strong challenge.

On the contrary, if the price turns down and breaks below the 20-day EMA of $1,206, it will suggest that bears are selling on rallies. That could sink the pair toward the support line of the triangle.

ETH/USDT 4-hour chart. Source: TradingView

The 20-EMA on the 4-hour chart is sloping up, and the RSI is near the overbought zone, indicating that bulls are at an advantage. If the price turns up and rises above $1,423, the pair could pick up momentum and rally to $1,550 and then to $1,700.

Conversely, if the price slips from the current level, the bulls will attempt to arrest the decline at the 20-EMA. This is an important level to keep an eye on because a break and close below it could sink the pair to the 50-SMA.

MATIC/USDT

Polygon (MATIC) completed an ascending triangle pattern when the price broke above the overhead resistance at $0.63 on July 13. This was the first indication of the start of a new uptrend.

MATIC/USDT daily chart. Source: TradingView

The moving averages have completed a bullish crossover, suggesting that buyers have the upper hand. However, the price action of the past few days has pushed the RSI near the overbought zone, indicating that a minor pullback or a consolidation is likely in the near term.

The critical level to watch on the downside is $0.63. If the price rebounds off this support, it will suggest that lower levels are attracting buying by the bulls. That could increase the possibility of the resumption of the uptrend. The MATIC/USDT pair could then rally to the pattern target at $0.95.

This positive view could invalidate if the price turns down and plummets below the 50-day SMA of $0.54.

MATIC/USDT 4-hour chart. Source: TradingView

The recovery rose above the overhead resistance at $0.75, but that pushed the RSI into the overbought zone. This suggests a minor correction or consolidation in the near term.

The bears will try to pull the price below the 20-EMA. If that happens, the pair could drop to the 50-SMA.

Alternatively, if the price rebounds off $0.75 or the 20-EMA, it will indicate that bulls are in control. That will increase the likelihood of the resumption of the uptrend.

Related: Ethereum traders gauge fakeout risks after 40% ETH price rally

FTT/USDT

FTX Token’s (FTT) price action in the past few days has resulted in the formation of a symmetrical triangle. This usually acts as a continuation pattern, but in some cases, it also performs as a reversal setup.

FTT/USDT daily chart. Source: TradingView

The moving averages are on the verge of a bullish crossover, and the RSI has risen into the positive zone, indicating that buyers have a slight edge. A breakout of the resistance line of the triangle will suggest that the uncertainty has resolved in favor of the buyers.

That could indicate the start of a new uptrend which could rise to $32 and later to the pattern target at $36.50. Contrary to this assumption, if the price turns down from the resistance line, the FTT/USDT pair could extend its stay inside the triangle for a few more days.

FTT/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that the price has reached the resistance line of the triangle, where the bears are expected to mount a strong defense. If the price turns down from the current level but rebounds off the 20-EMA, it will indicate that traders are buying on dips. That could enhance the prospects of a break above the triangle.

This positive view could invalidate in the short term if the price continues lower and breaks below the 20-EMA. That could pull the pair to the 50-SMA, signaling that the range-bound action may continue for a few more days.

ETC/USDT

Ethereum Classic (ETC) broke out of the $12.50 to $18 range it had been stuck in for the past few days. This suggests that bulls are attempting to form a double bottom pattern.

ETC/USDT daily chart. Source: TradingView

The 20-day EMA of $15.87 has started to turn up, and the RSI has risen close to the overbought territory, indicating that bulls have the upper hand. The critical level to watch on the downside is $18. If bulls sustain the price above this support, the ETC/USDT pair could start its northward march toward $23.50 and then $25.

Contrary to this assumption, if the price turns down and slides below 18, the pair could drop to the moving averages. A break below the 20-day EMA could suggest that the bears remain active at higher levels.

ETC/USDT 4-hour chart. Source: TradingView

The sharp up-move above $18 has pushed the RSI into the overbought territory. This suggests a minor pullback or consolidation in the near term. The bears will try to pull the price back below the breakout level while the bulls will attempt to defend it.

If the price rebounds off $18, it will suggest that bulls have flipped the level into support. That could increase the possibility of the resumption of the up-move. Alternatively, a break below $18 could strengthen the bears who will try to pull the pair to $16.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.