Can these reasons cause this move in Ethereum Classic?

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Despite being down 74.04 percent from its all-time high, Ethereum Classic was up 15% from its recent low on June 22. At the time of writing, the cryptocurrency was trading just over the $40 mark offering YTD returns of 618.36%.

As opposed to most alts, ETC was one of the few star gainers of Q2 as per a recent report from CoinMetrics. The report reviewed the performance of Bitcoin and altcoins during Q2 2021 and analysts found that even with the sharp May 19 market correction a few assets finished the quarter in the green.

Ethereum Classic (ETC) was the second-best gainer preceded only by Dogecoin, and the former gained a sweeping 297% despite a nearly 39% decline in the price of Bitcoin.

Following the Thanos stable release in 2020, ETC is preparing to deploy the Magneto hard fork to enhance its blockchain network by the end of this month. Magneto is now slated for July 21st, and it will incorporate ECIP-1103.

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With many predicting a price increase for the asset by the end of this month, current mood appears to be optimistic, according to LunarCrush, despite the alt’s recent 25% drop. The majority of ETC’s social indicators were positive, with the cryptocurrency achieving a Galaxy Score of 63 on the charts.

Source: LunarCrush

Having said that, it is worth noting that the on-chain metrics and development activities for Ethereum Classic do not present a positive image of the alt. After falling towards the end of June, ETC’s percentage of total stablecoin supply held by whales with more than 5 million USD nevertheless oscillated below the May-June levels. Despite remaining above the pre-May highs, the indicator has been drifting sideways for the majority of this month.

The alt’s development activity provided a concerning image, as it had plummeted to lower levels by January 2021. Despite network improvements, this indicated a lack of activity and network development in the sector.

Source: Sanbase

A closer examination of the ETC price movement indicates that it is now challenging a critical support level around $40.7. Because the asset is oversold, a triggered rebound might cause the asset’s price to rise. If it rebounds off this level, an upswing may ensue, leading to a retest of the $47.6 resistance level. A collapse of the range at a lower, $40 level, on the other hand, will undermine the bullish argument.

Source: ETC/USD, TradingView

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