Ethereum Classic Prints Bearish On-Chain Signals Despite Bitcoin Breakout
- Bitcoin is breaking higher, but the same cannot be said about Ethereum Classic (ETC).
- The popular altcoin has dropped in the past 24 hours, posting a loss of around 2%. This means the asset is underperforming BTC by 5%.
- Ethereum Classic is printing bearish on-chain and technical signs as it prepares to move lower.
- This comes after the underlying network was hit by two 51% attacks that made many question the value of ETC.
- Ethereum Classic trades at around $7 as of this article’s writing, making it one of the top-30 digital assets in circulation.
Ethereum Classic Prints Bearish On-Chain Signs
Ethereum Classic is printing bearish on-chain signals despite an ongoing Bitcoin price breakout. Blockchain analytics startup IntoTheBlock shared the data seen below on Monday morning.
According to the firm, ETC is currently “mostly bearish” with three out of five of the company’s core indicators currently printing “bearish” signals. These three indicators are “Net Network Growth,” the number of addresses with ETC balances; “In the Money,” an indicator of the momentum of the profitability of investors, and the number of “Large Transactions.”
Image of Into The Block's Ethereum Classic on-chain/exchange signals dashboard as of Monday morning.
The slowdown in Ethereum Classic’s network activity may pertain to news regarding Coinbase’s listing of the crypto asset.
Due to recent issues with the blockchain, the company will require two weeks of block confirmations for ETC deposited to show up in user accounts. This makes it effectively impossible for one to deposit their ETC coins on the exchange, thus decreasing some transaction demand:
“Given the recent network attacks on Ethereum Classic, we have increased the confirmation time for ETC sent to Coinbase & Coinbase Pro to ~2 weeks. We are actively monitoring the situation and will provide updates as they become available.”
Given the recent network attacks on Ethereum Classic, we have increased the confirmation time for ETC sent to Coinbase & Coinbase Pro to ~2 weeks. We are actively monitoring the situation and will provide updates as they become available.
— Coinbase Support (@CoinbaseSupport) August 8, 2020
It is unclear to what extent ETC’s market value correlates with the on-chain trends of Ethereum Classic.
Is ETC Worth Anything?
Although ETC is still a cryptocurrency worth $800 million, some have begun to question if the network has any value at all.
For context, Ethereum Classic saw two 51% attacks in the span of a week. A 51% attack is when a single entity/group manages to obtain more than half (hence “51%”) of a blockchain’s mining power, allowing them to reorganize the chain and pull off other tricks. The most common threat of a 51% attack is “double spending” coins, allowing one’s balance to be used more than once on service providers or users.
Analysts say that if ETC cannot properly secure value due to these attacks, it is intrinsically worth nothing. Dan Tapiero, the founder of Gold Bullion Int. and an outspoken Bitcoin bull, commented:
“Why isn’t #ethereumclassic worth zero? It has a $800mm mkt cap. Why own something that can be easily attacked and stolen when there are so many alternatives (even within alts space). Digital currency is supposed to be secure. What am I missing here?”
Why isn't #ethereumclassic worth zero? It has a $800mm mkt cap.
Why own something that can be easily attacked and stolen when there are so many alternatives (even within alts space).
Digital currency is supposed to be secure.
What am I missing here?https://t.co/k78W8m6kL0
— Dan Tapiero (@DTAPCAP) August 6, 2020
This sentiment was echoed to a T by Mati Greenspan, a fund manager in the cryptocurrency space, Brave New Coins Josh Olszewicz, and many more.
Featured Image from Shutterstock Price tags: etcusd, etcbtc Charts from TradingView.com Ethereum Classic Prints Bearish On-Chain Signals Despite Bitcoin Breakout