Ethereum Classic (ETC) Shows Ongoing Losses

Ethereum Classic is a smart contract platform that enables users to trade money, property, shares, and manage digital assets without needing intermediaries. Ethereum Classic was launched on July 20, 2016, as a distributed network with a blockchain ledger, its native cryptocurrency (ETC), and a strong ecosystem.

Although Ethereum and Ethereum Classic were initially based on the same code, Ethereum Classic has since set itself apart through its unique technological approach. One of the key differences is that Ethereum Classic continues to use proof-of-work mining, while also implementing a fixed monetary policy. The total supply of ETC is capped at 230 million tokens, a feature that may attract investors who are drawn to the idea of increased scarcity over time.

At the beginning of this trading week, Ethereum Classic (ETC) continues to lose value, and traders should be cautious as the risk of further declines has not been ruled out. The U.S. central bank has indicated that more large rate hikes are expected, with its policy rate projected to rise to 4.40% by the end of this year, potentially peaking at 4.60% in 2023.

Several key macroeconomic data reports are set to be released this week in the U.S., likely causing movement in both the stock and cryptocurrency markets. CPI data will provide insights into how financial regulators are handling inflation, a critical issue since Fed Chair Jerome Powell recently emphasized the U.S. Federal Reserve’s commitment to bringing inflation down to manageable levels, even if it takes time.

The potential for upside growth for Ethereum Classic and the broader cryptocurrency market in Q4 remains constrained, particularly if the U.S. Federal Reserve continues its aggressive rate hikes. Goldman Sachs analysts recently suggested that the Fed may increase the pace of rate hikes in light of recent economic data, while Nomura analysts predict that new inflation data could lead the central bank to implement an even larger rate increase.

Concerns are growing that further interest rate hikes from the U.S. Federal Reserve could trigger a deeper sell-off, putting additional pressure on Ethereum Classic (ETC) to maintain its current price levels. It is important to note that the cryptocurrency market tends to mirror trends in the stock market, so a downtrend in stocks could also impact cryptocurrency prices. Billionaire hedge fund manager Paul Tudor Jones warned that the Federal Reserve’s actions could lead the economy into a recession in the short term as part of its strategy to combat inflation. Paul Tudor Jones stated:

“This means more pain for financial markets, but once the Fed stops raising interest rates, the market could see a massive rally.”

Technical Outlook for Ethereum Classic (ETC)

Ethereum Classic (ETC) has declined from $42.35 to $25.74 since September 06, 2022, with the current price standing at $25.90. It may be challenging for Ethereum Classic to hold above the $25 level in the near future, and a drop below this point could signal a potential test of the $20 price level.

On the chart below, I’ve marked the trendline, and as long as the price of Ethereum Classic stays below this line, it indicates that a trend reversal is unlikely, keeping the price in the “SELL-ZONE.”

Key Support & Resistance Levels for Ethereum Classic (ETC)

In the chart (from February 2022), I’ve marked important support and resistance levels to guide traders in understanding potential price movements. Ethereum Classic remains in a “bearish phase,” but if the price rises back above $40, it could signal a trend reversal, with the next target near $45. Currently, the support level is $25, and if the price falls below this, it would trigger a “SELL” signal, with a potential move toward $23. If the price drops under $20, which is a significant support level, the next target could be around $15.

Indicators Supporting Potential Price Increase for Ethereum Classic

Ethereum Classic surged by more than 200% from mid-July, rising from $13.35 to a high of $45.70 on August 13. This sharp rally saw Ethereum Classic testing the $45 level multiple times but failed to sustain itself above it. The price is currently above the $25 support, but if it falls below this level, it could likely test the $20 range. Despite some surveys showing that institutional investors remain bearish on Ethereum Classic, particularly due to concerns about the Federal Reserve’s aggressive interest rate hikes, there is still potential for a trend reversal if the price climbs above $40. If this happens, the next target could be around $45.

Signs Suggesting Further Decline for Ethereum Classic

Ethereum Classic, along with many other major cryptocurrencies, is under continued pressure as analysts agree that the U.S. Federal Reserve is likely to maintain its aggressive monetary stance. The current support level for Ethereum Classic is at $25, and breaking below this would trigger a “SELL” signal, paving the way for a possible decline to $23. Should the price dip below $20, which is a robust support level, the next target could be around $15.

Ethereum Classic Price Predictions from Analysts and Experts

The upside potential for Ethereum Classic and the broader cryptocurrency market remains limited in Q4, especially if the U.S. Federal Reserve persists with its aggressive monetary policy. Goldman Sachs analysts have indicated that the Fed could accelerate rate hikes, while Nomura analysts predict that new inflation data might lead to an even larger rate hike. Hedge fund manager Paul Tudor Jones also suggested that the Federal Reserve might push the economy into a short-term recession as part of its efforts to combat inflation. According to Jones, while this would cause further pain for financial markets, the end of rate hikes could trigger a significant market rally. Mike Novogratz, head of Galaxy Digital and former Goldman Sachs fund manager, also stated that cryptocurrencies would not see significant growth until the Federal Reserve shifts from a hawkish policy to monetary easing.