Ethereum Classic (ETC) has broken out from a short-term pattern and is approaching a crucial resistance area at $45.
The ETC hash rate reached yet another new all-time high on Tuesday. One of the reasons for this is the migration of miners from ETH to ETC due to the switch of Ethereum from proof-of-work to proof-of-stake.
Ethermine also offers the ETC mining pool, so it is easier for miners to transfer to this pool. Since Ethereum classic was first created after a split in the ETH ecosystem as a result of differing responses to the DAO hack, there have now been renewed calls to support the ecosystem and help it gain traction.
The increase in hash rate has in turn caused an increase in mining difficulty, which is also at an all-time high. This is an inherent mechanism that serves to balance mining rewards.
ETC breaks out
ETC had been decreasing since reaching a high of $45.70 on Aug 13. The downward movement has initially contained inside a descending wedge.
However, the price broke out on Sept 5 and increased by 22.60% the same day, creating a large bullish candlestick.
At the same time, the daily RSI broke out from its descending resistance line. This in turn grants legitimacy to the breakout and suggests that the price will continue increasing. If so, the closest resistance area would be at $45.
ETC is also at the resistance line of a long-term pattern. Thus, an increase above the $45 resistance area would also cause a breakout from the aforementioned long-term pattern.
Wave count analysis
The wave count also supports the continuation of the upward movement. The most likely count indicates that ETC has completed a five-wave upward movement (white) and an A-B-C correction afterwards.
If the count is correct, it would mean that the price initiated a bullish trend reversal on June 18.
A decrease below the wave C low at $30.34 (red line) would invalidate this count while an increase above the wave B high at $45.71 (green line) would confirm it.
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