What does the ETC decoupling from ETH mean for investors?
The last few days have been pretty hectic for ETH. In less than a week, the world’s largest altcoin went from $ 2,800 to $ 3,500. If ETH has recovered in the past, all of the altcoins have usually followed suit.
Will the above scenario repeat itself as most altcoins have a pretty good week?
ETC separates from ETH
There was a time when ETC only made sense if the portfolio also included ETH. However, this story is slowly changing.
The ETC market volatility index has plummeted over the past few months, so the price candles on the daily chart are pretty compressed.
ETC daily volatility | The source: Messari
In fact, ETC remained stagnant in the $ 40-70 range even during the September bear market. The ETH price, on the other hand, has made a big leap since the beginning of this month.
ETH / USDT (left) and ETC / USDT (right) | Source: TradingView
While ETC’s pattern on the chart is still pretty similar to ETH’s, it should be noted that ETC cannot keep up with ETH’s growth rate.
In fact, investors are bearing the brunt of the ETC’s stagnation. For example, in the past 3 months, ETH has brought investors more than 64% return while ETC is only 7%.
ETH’s bullish catalyst
Overall, the natural growth of ETH can be attributed to network expansion and growth. In the macro timeframe, Ethereum’s development performance is pretty consistent.
In contrast, ETC’s performance in this regard is not very impressive after major spikes in 2018-2020. While the index has risen lately, it should be noted that it is still very far from previous highs.
Development activities of ETH and ETC | The source: mood
In order to survive in the face of increasing competition and ever changing trends, every network should introduce more sophisticated versions. Ethereum responded well to this requirement. For example, the network did the London Hard Fork in August and the Altair upgrade will be activated this month.
In contrast, nothing is noticeable in the development of Ethereum Classic. Worse, the ETC Cooperative recently withdrew support from the ETC Treasury Department. They also noted that ECIP-1098 was no longer a viable proposal.
In addition, the ETH is supported by institutional actors. As recently as last week, cumulative institutional inflows were over $ 20.2 million. The ETC market has almost no such support.
In fact, the decreasing interest of retail participants in ETC can also be clearly seen in the trading volume chart.
ETC volume | The source: Messari
If volatility continues to remain low, development activity does not keep pace and additional capital does not flow into the market, ETC will not be able to move with ETH during the rally.
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According to AMBCrypto