The price of Ethereum Classic has not fallen below $7.00 but could do so if the bears master the bulls following reports of a new 51% attack.
The price of Ethereum Classic against the US dollar has remained above $7.10 – despite the fact that its block is undergoing a potentially catastrophic attack.
Bulls in the ETC/USD pair have managed to push the bears back, but may still struggle to maintain support in the crucial $7.00 zone if selling pressure increases and its recent downward trend continues into the next few sessions.
At the time of writing, the Ethereum Classic community is waking up to the news of another damaging report that the blockchain has suffered a second 51% attack in a week.
On August 6, Ethereum Classic’s mining difficulties increased by more than 52% in just a few hours, with the exchanges being among the first to acknowledge that there had been another 51% attack on the network.
Binance was among the first platforms to tweet, claiming that Ethereum Classic had a new reorganisation of its blockchain involving more than 4,000 blocks. This follows last week’s attack which saw a malicious entity steal more than $5 million from the native token via a well-coordinated double-spend attack. As in that case, the attacker(s) handled over 4,200 blocks.
Ethereum co-founder Vitalik Buterin noted that Ethereum Classic may be better suited to a proof of issue (PoS) model. Ethereum itself is preparing to move to PoS via its ETH 2.0 update scheduled for late summer.
Technical perspective of the ETH/USD pair
Ethereum Classic has remained in the $7.50 range for the past five days after climbing back up to $6.60 on August 2. According to CoinMarketCap data, the price of crypto money has dropped 1.57 per cent in the past week.
While there is a strong presence of the decline, as suggested by the decrease in buying volumes, the technical outlook suggests that sideways trading is the most likely scenario in the short term.
The ETC/USD pair has lost support for the 50-SMA at $7.298 and the 20-SMA at $7.123 in the face of the decline. However, the bulls may still have their say as the RSI has recovered slightly. The MACD also forms a positive divergence on the 4-hour slot, despite the negativity generated by security risks.
For now, bulls must prevent a break below $7.00 – a crucial area that must be defended to prevent a further decline.
A strong push from current levels could cause bulls to revise their major resistance to around $7.50 and then build on that resistance to target $8.00. If the price fails to hold above $7.00, a sharp decline could see the bulls rely on support for the SMA 100.