Mid May Update: Technicals

ETCBTC chart looks dejected – ETC got heavily beaten down, just like vast majority of other altcoins and it is right now descending int the all time lows, measured in satoshis. It is right now hanging below the 100k satoshis at a level that was the ultimate floor for ETC. This floor was formed way back in December 2016 and beginning of 2017. It was defended again in December 2018 and ETC has been lingering right above it for the most part of this year.

ETC needs to fight hard to win back this floor before anyone would even think of entering with a position in ETC.

Considering that market is completely focused on bitcoin’s fight with the newly conquered heights, altcoins are rotting on the racks and waiting for their season to commence. While that wait goes on, ETC and other altcoins slowly lose value to BTC and go back to their all time lows. Entering ETC right now would be very risky and it would be wise to wait for a thaw of altcoins icy phase.

Below is our long-term forecast where we cover general market movements and sentiment shifts before delving deeper into the specific predictions for ETC.

Ethereum Classic (ETC) is a fork of Ethereum. Or, as some would say, Ethereum is a fork of Ethereum Classic… depending on who you ask and can be a little confusing. Either way, the original Ethereum blockchain is split into two competing versions. The DAO aka the Decentralized Autonomous Organization was a complex smart contract which was going to revolutionize Ethereum forever. It was basically going to be a decentralized venture capital fund which was going to fund all future DAPPS made in the eco-system.
Within 28 days of its formation, it accumulated over $150 million worth of ether in a crowdsale. At that time, it had 14% of all ether tokens issued to date. On 17th June 2016, someone exploited this very loophole in the DAO and siphoned away one-third of the DAO’s funds. That’s around $50 million dollars. The aftermath of the hack split the community: one part wanted to do a hard fork and create a new chain with the separation right before the DAO attack. That gave birth to Ethereum.

The ones that were not in agreement with the hard fork and insisted on the immutability of the blockchain stayed in what is now called Ethereum Classic.

ETC is a smart contracts platform that has some of the largest network activity of any blockchain, consistently higher than Bitcoin Cash, and neck-and-neck with Litecoin. We have multiple developer teams, all of whom are committed to the long term ETC vision. We are in the top-10 in programmer activity (measured by code commits). We have numerous sources of funding, and we continue to grow, day-by-day, commit-by-commit, line-by-line of code to create a bullet-proof network that anyone can use.

Both blockchains are identical in every way up until block 1920000 where the hard-fork to refund The DAO token holders was implemented, meaning that all the balances, wallets, and transactions that happened on Ethereum until the hard-fork are still valid on the Ethereum Classic Blockchain. After the hard-fork, the blockchains were split in two and act individually.

The battle between Ethereum and Ethereum Classic is both an ethical and ideological one.

There is a clearly defined roadmap for this year. These 5 projects are highlighted as the major focus for the year:

MULTI-GETH
ETC Labs Core is maintaining a multi-geth patch that enables geth to support multiple networks. Eventually they hope to have multi-geth integrated into mainline geth.

MANTIS
Mantis is a node client built entirely from scratch using Scala. Scala is a programming language that supports functional programming and favors immutability. It also offers developers ease of testing and predictability. The client is also compatible with the Daedalus Wallet, which provides users with a UI to access and manage funds. Mantis sets the foundation for future innovations in Ethereum Classic.

SPUTNIK VM
SputnikVM is a highly efficient and pluggable implementation of the Ethereum Virtual Machine. It is a standalone EVM that can operate independently of a blockchain and is capable of running on low powered devices; with plans to run on ultra-low power devices.

EMERALD PLATFORM
Toolkit to build applications running on Ethereum ETC, contains UI Components, Libraries for Javascript and Rust, Icons, Build tools, etc. Targeting various platforms, such as Desktop, Mobile, Web and even Shell Scripting.

SIDECHAINS
Sidechains will become a native part of ETC infrastructure and protocols. This will increase ETC’s scalability and bring blockchain to a diverse group of handheld and IoT devices for the first time.

The downfall of altcoins that were mainstream media darlings at the start of the last year, ETC among them, can be attributed, in part, to novice investors getting scared off once the bear market kicked in with a vengeance. Every resurgence of bitcoin in recent period, was met with the, for the most part, inability of altcoins to rally with it. Reason for that can be rookie investors learning from their mistakes, while smart money that was previously watching from the sidelines has begun to enter into bitcoin.

These entities weren’t about to buy BTC when it was trading at an all-time high, but they’ll take a look now, having missed the boat the first time around. None of them, it seems, are interested in altcoins however, despite the fact that many are trading at a 5x discount. Institutional investors may be cautious, but they’re not foolish.

We should consider crypto valuations like educated gambling, a ‘prediction market’ where we are betting on the odds of project and token success. There are some catalysts of success we can identify:

Real user traction is the most important driver of success, that is what most of holders call “adoption”. If people start using certain crypto project because they find it useful and it makes their life easier, that is a guarantee of success. So far, almost no crypto project can claim to have done so.

Strong financial warchest that will enable teams behind the project to develop their visions, incentivize other developers to join them and start using their product is also a crucial aspect of any project. Tied into it is treasury management – especially for the project that had big ICO proceeds. Temptation to squander all those millions into “conferences and events” (read hard-core partying on yachts and luxury hotels) was massive, especially if we consider that majority of token projects founders were no-names and ordinary employees that worked for a paycheck before the ICO fairy-tale happened to them.

Another adoption indicator – network effects, where every additional user of a good or service adds to the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.

If you can objectively notice that your favorite token project has some of these traits happening for it, be happy – you might have found a winner.

Token success is completely dependent on tokenomics. As defined by infloat.co, tokenomics involves the incentivization of certain stakeholders to ensure particular behavior.

So, tokenomics is essentially an incentive structure designed to ensure that a token has a purpose and utility within its native network. It is the study of how coins/tokens work within the broader ecosystem that can be considered as a sovereign micro-economy. This includes such things like token distribution as well as how they can be used to incentivize positive behaviour in the network.

For example, bitcoin is designed to ensure that bitcoin miners have a reason to mine new bitcoin. Miners validate bitcoin transactions and receive (or create) newly minted bitcoin in the process.

On the other hand, individuals, businesses and other bitcoin users pay a transaction fee for miners to include their transaction in the next block. This ensures that even when all bitcoin have been minted (to the tune of 21 million, which should happen in around 2140), bitcoin miners are still incentivized to keep ‘mining’ (i.e. validating transactions).

To paraphrase all of the above in the simplest terms: if you, after weeks of research and reading, can’t figure out why the project needs to have a token, it probably doesn’t.

So why does the token exist then?

– To make the project founders rich.

But there are some people on Twitter, Reddit, Telegram claiming otherwise.

-Yes, they are either: paid to do so by those same founders, they are desperate and delusional bad holders or they are just stroking their own ego with newly learned fancy economic terms and jargon.

Needless to say – stay clear of such projects.

ETC, as the rest of the market, is tied at the hip of bitcoin’s price action. If bitcoin embarks on another bull run, ETC can hope for one as well. Since that is very unlikely, don’t expect much to change for ETC price-wise in this year. So 2019 will be a year of boring sideways action with minor bitcoin ignited jumps and slumps.

In general:

The main currency in cryptocurrency markets is Bitcoin and given this, altcoins tend to fuel Bitcoin runs and Bitcoin tends to do the same in return. Given this relationship, Bitcoin price movements (or lack thereof) tend to effect altcoin prices.

When Bitcoin goes up swiftly, it will likely:

In cases when Bitcoin plunges, it will likely:

When Bitcoin moves sideways, it will likely:

To summarize, Bitcoin is the focal point of the crypto market in many ways, and with BTC trading pairs on every exchange, the gravity of Bitcoin is hard to evade.

The majority of projects will fail — some startups are created just to gather funds and disappear, some would not handle the competition, but most are just ideas that look good on paper, but in reality, are useless for the market. 

Vitalik Buterin, co-founder of Ethereum said:

“There are some good ideas, there are a lot of very bad ideas, and there are a lot of very, very bad ideas, and quite a few scams as well”

As a result, over 95% of successful ICOs and cryptocurrency projects will fail and their investors will lose money. The other 5% of projects will become the new Apple, Google or Alibaba in the cryptoindustry. Will ETC be among those 5%?

It is a fifty-fifty situation.

There are couple of solid developer teams behind the project but their core value proposition is crammed with other, more potent teams with better and more established brands and it is hard to see ETC ever seizing the driving seat in the smart contracts section of crypto world.

Because if anything goes wrong when Ethereum switches to Casper, everyone will rush over to ETC.

IOT – internet of things; the devs over at ETC are working on getting the ETC blockchain to be able to speak to ADA as well as ETH.

It is a proof of work, Turing-complete blockchain, with the cryptocurrency and smart contracts both fully integrated in the base layer. The ETC ecosystem is still very focused on immutability as a core value, not having any formal governance mechanism, and guaranteeing emergent decision making thru free adoption of the network and rule changes. ETH, which currently shares the same proof of work +Turing complete niche, will very likely migrate to PoS and sharding which are both less secure technologies.

For a cryptocurrency that suffered a serious 51% attack, this is some solid resilience. It is like Ethereum Classic (ETC) community has not been affected at all by the recent attack.

Because of Ethereum.

Lack of security on the network due to the low prices of tokens and consequently, low miners’ interest that all culminates into a low hashrate. We already had a foretaste what happens when you have weak network hashrate – you get attacked by malicious actors. Even though ETC surprisingly shook off the event, the taint on its record, credibility and integrity stays. It was supposed to be enshrined, immutable chain but it got easily manipulated and double spent.

Another reason for the potential downfall in the future for Ethereum Classic is that the developers of the original Ethereum Blockchain switched to Ethereum but not towards Ethereum Classic.

Highly doubtful that ETC ever sees those heights. Zero is a more plausible option.

No, certainly not. Judging by the teams activity on social media, developers activity on GitHub and coin’s presence on exchanges we can safely say ETC is far from a dead project. However, community bustle has died down and is only sporadic these days. That is a bad omen for any project.

All of this summed up means one thing: ETC might live through couple of orchestrated and, for a regular trader, completely unpredictable pumps but the majority of time will be murky sideways trading with small volume and no significant interest from the market.

Price will heavily depend on what BTC will do and since many analysts think BTC will not be making big moves in this year, it is hard to expect ETC will do them either. The price will probably stagnate and record slow-moving depreciation or appreciation depending on the team activity, potential technological breakthrough or high-level partnership.

With the market being completely unpredictable, forecasting the cryptocurrency price is really more of a gamble and luck rather than a data driven guesstimate.

Let’s throw a glance at the eminent publications and personalities, and their predictions regarding the Ethereum Classic (ETC) price, which will give us another point of view to consider:

Cryptoground gives a positive outlook for ETC and sees it reaching $10 in this year.

Trading Beasts have given ETC prediction on monthly basis and they have forecasted that by the end of 2019, Ethereum Classic might reach $16.78.

Digital Coin price also has given a monthly prediction for Ethereum Classic and they have projected that by the end of 2019, ETC might fall to $4.80.

The outlook is murky and ETC will probably stay in the shadows of top coins and potentially spin out of the top 20 projects as the new, more promising teams and their coins spring up. Depending on what bitcoin does, ETC could still be up in USD (thanks to BTC) but most plausible prediction would be it hovers within one standard deviation of the current price.

If ETC maintains its relevance in the industry and manages to stay ahead of their competition (highly unlikely), it might be worth 10-100x than its hitherto all time high.

If ETC maintains its relevance in the industry and manages to stay ahead of their competition (highly unlikely), it might be worth 10-100x than its hitherto all time high.

Predicting prices of novel, highly volatile and risky asset classes is a thankless task – best answer is no one knows. Educated guess is that realistic ETC price for the foreseeable future is somewhere between its current price and its all time high.

The post Ethereum Classic (ETC) Price Analysis And Prediction 2019 – Where Does The Meltdown Stop? (Mid May Update) appeared first on CaptainAltcoin.

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