Well, Ethereum Classic has certainly come back to life after an impressive bullish explosion which totals 190% in the first month of 2020 alone! The cryptocurrency has already exceeded many expectations for the year - but I am pretty sure we can go much further higher!
Ethereum Classic witnessed a pretty dull year during 2019 as the cryptocurrency started from a low of around $4 and climbed as high as $9.67. This run was pretty decent, however, during Q3 and Q4 of 2019, Ethereum Classic tumbled again and dropped lower than the 2019 opening price to reach a low of $3.39 during December 2019.
The cryptocurrency sprung into an incredible bullish run as the project conducted another hard fork which brought the interoperability between Ethereum Classic and Ethereum much closer together. Things are not quite where they need to be for full compatibility, however, the team is making great progress in getting there.
After the hard fork, ETC surged from the January low of $4.21 to the current trading level of $12.25 (as of late-Jan 2020), equalling a major 190% price hike!
Some may think that the bullish run might have already run its course for 2020, and after a 190% price surge, I would not really blame them. However, ETC has further developmental upgrades in the pipeline that will improve its stability, security, and scalability. Furthermore, they have another planned hard fork that will complete the bridge in making Ethereum Classic completely compatible with Ethereum which would allow all of the decentralized applications that are currently run on Ethereum to easily be deployed on Ethereum Classic!
For the reasons stated above, and more discussed below, I believe that ETC has the potential to surge by a further 100% in 2020 to reach my target price of $25.00 at some point during the year. In total, this would mean that the entire price increase for 2020 (if the price does reach my target) would be an epic 490%! A level of return that any investor could only dream of!
In this article, I’ll firstly cover a range of topics that I believe will influence ETC in reaching my $25.00 target during 2020 and then analyze ETC on the weekly chart to highlight some areas of resistance on the way toward the target.
What Is Ethereum Classic?
Ethereum Classic has a very jittery history as it was birthed as a result of a 3.6 million ETH ($80 million at the time) hack during July 2016. The history and controversy behind this hack are well known, so I won’t be covering it here. However, if you need to know more, or just need a refresher, take a look at this extensive write up on Ethereum Classic (and this one also) and its contentious history.
In a nutshell, Ethereum Classic is a hard fork of Ethereum and can even be realized as the original Ethereum chain. When the aforementioned hack occurred, the Ethereum Classic camp was adamant that Blockchain Immutability was a very important feature to protect and so they decided to remain on the same blockchain post-hack - resulting in a complete split within the community.
Whilst the core of the Ethereum community moved to an entirely new blockchain, including all dApps that were already deployed on ETH at the time, Ethereum Classic remained on the same original blockchain.
Hard Fork Galore
Ethereum Classic underwent a number of hard forks over the last year alone. The majority of these hard forks were geared toward making Ethereum Classic more interoperable with its sister-chain Ethereum. This is being done so the two chains can communicate with each other and, due to the increased compatibility between the chains, all of the dApps that are run on the Ethereum blockchain will eventually be able to be deployed on the Ethereum Classic blockchain just as easily.
Atlantis Hard Fork -
On September 12th, 2019, Ethereum Classic underwent the Atlantis hard fork. The proposal was ECIP-1054 (Ethereum Classic Improvement Proposal) which enabled the Spurious Dragon and Byzantium network protocol upgrades, starting the road to make ETC and ETH more interoperable with one another. This hard fork also introduced a number of security improvements as well as introducing zk-SNARKS into the Ethereum Classic network as it heads toward privacy.
Agharta Hard Fork-
Proposed as ECIP-1056 and implemented in early January 2020, the Agharta hard fork included features from the Ethereum Constantinople and Petersburg network upgrades. The Constantinople upgrade revolved around optimizations for developers as well as including code upgrades for future scaling solutions. Furthermore, for Ethereum itself, Constantinople came with a block reward halving.
Things To Look Forward To
Aztlan Hard Fork
Enable the Istanbul network protocol upgrade on Ethereum Classic.
EVM-LLM project
This will bring a new range of programming languages to the Ethereum Virtual Machine that goes past the scope of just Solidity. This is great news as developers have had a love-hate relationship with Solidity due to it being a relatively new programming language. Introducing more languages to the virtual machine will give developers more tools to build a wider range of dApps as they can use languages that they are more comfortable with.
EVM-LLVM is almost ready for alpha testing (as of late January 2020)
Other notable features on the horizon for developers include;
- OpenRPC
- ETH-JSON-RPC API
- Jade
- Multi-GETH
- Mantis
- Sputnik VM
- Emerald Platform
- Sidechains
Find out more about these individual features from this latest ETC-Core update.
Development Pace Continues To Regrow After Holiday Dip
As expected, the developmental activity took a slight downturn during the Christmas/New Year period. Everybody needs a break so we can’t really say anything negative about this. The good news is that as the new year kicked in and the Agharta hard fork approached, data from Santiment shows that the development activity started to pick back up for Ethereum Classic.
Ethereum Classic (ETC) Price Analysis
LONG TERM - WEEKLY CHART
What Has Been Going On?
Taking a look at the weekly chart above, we can clearly see the range that ETC was trading within 2019. It had started the year at around $4.00 and went on to climb higher to create the 2019 high at around $9.67. However, things turned around after the mid-year and ETC started to drop further lower again, creating a fresh 2019 low at around $3.39.
Nevertheless, after placing this December 2019 price low, Ethereum Classic went on to rebound higher. It did not take long for ETC to break above the 2019 high at $9.67 as ETC rose above this in the first week of 2020 - although it did not close above. It took another 2 weeks for ETC to break higher above $9.67 and $10.00.
Toward late January 2020, ETC continued to surge higher as it rises into resistance at a long term bearish .382 Fibonacci Retracement level priced at $12. This bearish Fibonacci Retracement is measured from the May 2018 high to the December 2018 price low. With the current momentum present within the market, we can most certainly expect ETC to continue higher from this level of support.
Are We Bullish Or Bearish (as of January 2020)?
After a 190% price surge in January 2020 alone, Ethereum Classic is most certainly in a very strong bullish trend. The current move is very parabolic and we should not expect this rate of increase to be sustained. However, after Ethereum Classic pulls back and consolidates for a while we can certainly expect it to slowly grind further higher toward my 2020 target over the course of the year.
For Ethereum Classic to now turn bearish, we must see the cryptocurrency falling and breaking beneath the short term .618 Fibonacci Retracement support at around $7.50. Even in this case, I would not expect it to drop further toward the 2019 lows at $3.39, let alone creating a fresh low beneath it.
Where Is The Resistance On The Way Up TO $25.00?
On the way up toward $25, the first level of resistance lies at $12.83 which is provided by a short term 1.414 Fibonacci Extension level (drawn in black). Above this, we can expect resistance to lie at $14.59 (long term bearish .5 Fibonacci Retracement) - which is further bolstered by a short term 1.618 Fib Extension at $14.18.
Beyond $15, resistance lies at $15.54 and $17.19 (bearish .618 Fibonacci Retracement level). If the bullish pressure can continue throughout the year to push ETC above the resistance at $20, immediate higher resistance lies at $20.90 (bearish .786 Fibonacci Retracement level). After pushing above $21, the bulls will need to contest resistance at $23.11 (.886 Fibonacci Retracement level) and $24, before being clear to make an attempt at my 2020 target of $25.
The momentum behind ETC has been extremely powerful during the first month of 2020 so I would not be surprised at all if ETC shoots well past my 2020 target. In this case, we can expect additional resistance to be located at $26 (May 2018 high) and $30 (very long term bearish .618 Fibonacci Retracement which dates back to the 2017 highs).
Where Is The Support If We Pull Back Slightly?
In the event that ETC starts to retrace over the following couple of months (this would not be surprising considering the meteoric rise we have already witnessed) we can expect to find the first strong level of support at $10 and $9.67 (2019 highs).
Beneath this, additional support can be located at $8.52 (short term .5 Fib Retracement) and $7.50 (short term .618 Fib Retracement). These two levels should provide ample support for ETC moving forward, however, if the sellers do push beneath here additional support is located at $6.05 and $5.20.
Conclusion
Ethereum Classic has witnessed a truly majestic price increase during the first month of 2020 and we can expect this price surge to continue much higher during the year. My price target lies at $25 which would equate to a further 100% price increase from the current price and would result in a 490% price surge for ETC during the 2020 year in total. It could even surge much higher than this!
With many major developmental upgrades on the horizon and the upcoming compatibility and interoperability with Ethereum, we can expect the buzz for ETC to continue throughout the year. To reach the $25 target, ETC must overcome resistance at $14.59, $17.19, $20.90, $23.11, and $24.
