The price of Ethereum Classic has been in a strong bearish trend over the last few days as the momentum of the Ethereum merge has waned. The ETC token plunged to $27.52, the lowest level since July 27th. It is down more than 36% from its August high.
Federal Reserve Interest Rate Decision
ETC was one of the largest beneficiaries of the recent Ethereum Merge event. The coin jumped to a multi-month high as investors bet that it would become a viable alternative between Ethereum developers and investors.
That’s because a small group of investors believe that previous proof-of-work Ethereum was far superior to proof-of-stake Ethereum.Former Ethereum Miners Migrate to Ethereum Classic Other popular PoW cryptocurrencies such as Firo and Ravencoin.
Therefore, the price of Ethereum Classic is falling as investors sell the facts. In financial transactions, investors typically buy assets before a major event and sell when the event occurs. It is said that you buy rumors and sell facts.
As the hype around The Merge faded, so did ETC prices. After months of much hype, an event has occurred and investors are waiting for the next catalyst.
The next significant event that could move Ethereum Classic and other cryptocurrencies is the upcoming interest rate decision by the Federal Reserve on Wednesday. Analysts expect the bank to decide on his 0.75% rate hike for the third time in a row.
If this happens, the Fed will have raised interest rates by 300 basis points this year. At the same time, we will continue to shrink our balance sheet through the quantitative tightening policy. Most importantly, analysts expect the Fed to hint that it will continue to raise rates this year. If the Federal Reserve becomes too hawkish, the price of ETC and other cryptocurrencies could fall.
Ethereum Classic Price Prediction
Looking at the 4-hour chart, we can see that the ETC price has been in a strong bearish trend recently. It managed to break below the critical support level of $30.61, the August 18th low. Also, the coin is forming a break-and-retest pattern, which is a sign of continuation.
It is also below the 25-day and 50-day moving averages. Therefore, the coin may continue to fall as sellers set the key support level at $20.
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