ETC (CRYPTO: ETC), the native asset of the Ethereum Classic, experienced a remarkable rebound on Wednesday as its price surged from $15.64 to a massive green daily candlestick.
What Happened: Dubbed as Ethereum (CRYPTO: ETH) spin-off ETC has rallied more than 24% in the past 24 hours, topping intraday gains at $19.52.
According to blockchain analytics firm Santiment, ETC is witnessing a massive rally. Not only is trading volume unusually high, but there is also a massive influx of shorts by traders on exchanges, suggesting that this rally could stretch further.
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It appears that the recent, sudden rise in price could be partly due to a short squeeze. This usually occurs when a high number of traders make bearish bets on an asset and its value instead increases.
Investors appear to be anticipating a potential regulatory crackdown on Ethereum later this year, which could explain why Ethereum Classic's price is jumping.
Last year, Ethereum underwent a major overhaul known as The Merge, transitioning from a proof-of-work (PoW) network to a proof-of-stake (PoS). These upgrades are meant to make the platform faster and more reliable, although the new staking features mean that it could be subject to increased governmental oversight, particularly within the U.S., where the SEC regards Ethereum as a financial security. Therefore, it's possible that the recent price surge was driven by the anticipation of forthcoming regulations.
Price Action: At the time of writing, ETH was trading at $12,544, up 2.7%. ETC was trading at $19, in the past 24 hours, according to Benzinga Pro.