ETC drops below critical amid ergo controversy, but here's the initiator
The Ethereum Classic [ETC] community can be seen amid a controversy regarding a smart contract platform called Ergo. This controversy could be the main reason for ETC's falling performance and price drop below $27.
The ETC controversy stemmed from Ergo's announcement that it had taken over a Twitter account linked to ETC. The official announcement revealed that the Twitter account has a large following in the ETC community.
The account takeover has generated some controversy, with some suggesting that Cardano's Charles Hoskinson was behind it. Hoskinson has criticized ETC in the past, thus sowing the seeds of discord within the ETC community.
On the other hand, Ergo clearly showed his focus. He plans to create smart contracts and dApps. Also, his involvement in ETC could pave the way for dApp development.
Are there bears around?
The controversy involving the Ethereum Classic and Ergo communities may have contributed to the drop in investor sentiment. On October 10, ETC was trading at $25.97 after falling just over 10% from last week's high.
ETC selling pressure over the past few days was strong enough to push below the $27.90 price range. This is an important support area for the price as it is located right at the 0.382 Fibonacci retracement level.
The previous bearish price action has experienced conflict in this area, suggesting that there has been some consolidation in the $27 range.
The excitement associated with Ethereum Classic during the Merger is gone. ETC has struggled with lower volumes since then, and low organic demand contributes to its downside.
Additionally, ETC volume has dropped to a 4-week low as it continues to move south. Even so, ETC maintained strong development activity as seen on Oct. 10. However, the early development did not do much to promote optimism and protect ETC against a major crash next drop.
The derivatives market also has a similar situation. Both Binance and FTX funding rates hover around four-week highs. The demand for ETCs in the derivatives market has also been disproportionate to price movements.
Ethereum Classic (ETC) price prediction for 2022
Evaluate possible outcomes
The current expectation is that the previous indicators could point towards a probable pivot. The factors discussed above can help drive a change in sentiment.
However, this is not a guaranteed outcome. We could see ETC continue on a downward trajectory if the recent controversy misleads investors too much to panic and sell.
The next support area for ETC is near the $25 price range which previously provided some support and resistance. The next support below that would be near the $22 price range at the 0.236 Fibonacci zone.
However, by press time on October 11, ETC had dipped to $23.95 after dropping nearly 11% in the past 24 hours.
Oct 11, 2022