The price of Ethereum falls below $ 600 as demand for XRP destabilizes the altcoin market

XRP has shown massive weakness following the SEC lawsuit. Its price dropped significantly from $ 0.65 to $ 0.21 in four days. a 67% crash.

Meanwhile, other altcoins have also made significant corrections in the past 24 hours, Investors likely worry that XRP isn’t the only currency on the SEC’s radar.

Ether (ETH) fell 14% on December 24th, then rebounded to $ 550. While Chain link corrected 38% toward a recent low of $ 8. Sushiswap (SUSHI) saw another correction and a sudden drop from $ 2.75 to $ 1.10a decrease of 61%.

The price of Ethereum falls below $ 600 as demand for XRP destabilizes the altcoin market
The price of Ethereum falls below $ 600 as demand for XRP destabilizes the altcoin market

In order to, The question now is whether the XRP debacle will continue to weigh on the altcoin market in the short term.. Let’s take a look at the tech specs to identify the current areas of support and resistance.

After the last fall, Ether seeks a new, higher low

ETH / USD weekly chart. Source: TradingView

Ether’s weekly chart looked great and hasn’t changed since the last drop. In this sense, Construction remains bullish and trending up.

The recent high of $ 675 confirms a new higher highThereafter, a higher low will ensure the continuation of the bull market for ether. This higher low is very likely to occur around the $ 450 area. This is the previous area of ​​resistance that is eager to seek support before continuing.

However, in order to have such a correction, Bitcoin (BTC) should be corrected heavily. Otherwise, this scenario is unlikely to occur. As long as Ether stays above USD 450, another rally could push Ether towards USD 1,200 to USD 1,300 next year.

The USD 620 resistance is the next critical level

ETH / USD daily chart. Source: TradingView

The ether daily chart looks less bullishwhen it broke below the critical $ 620 threshold that should have broken for an immediate bullish continuation. A break above USD 620 would practically guarantee a new high for the ETH price.

However, the previous resistance zone and rejection at USD 620 suggest that further downward moves are likely in the near term.

So, The critical support zone for Ether now is the $ 550 areasince it is the most recent highest low. As long as that is the case, the bullish case is still on the table.

The price is likely to fall to $ 450 if $ 550 goes down after a renewed rejection of $ 620 as support. This $ 450 level is the previous resistance zone and a significant area of ​​support for the weekly period.

Bitcoin’s dominance is parabolic

Weekly graph of bitcoin dominance. Source: TradingView

The weekly chart shows the dominance of Bitcoin a progress towards 70%. The main reason for this rally is the weakness of XRP as it is the second largest altcoin.

The dominance chart will continue to rise as the XRP continues to decline. At the same time, The weakness of ETH / BTC does not help in the case of a “low season” in early 2021 either.

However, one thing to watch out for is the possible top of the bitcoin dominance table, as it usually does in December. Since 2016, the dominance table peaked in December. After that cap, altcoins saw massive gains in the first quarter.

The ETH / BTC pair is crucial here as it needs to bottom out before a potential rally for altcoins takes place.

ETH / BTC weekly chart. Source: TradingView

Unfortunately, The weekly ether chart shows a clear breakdown under the support of the BTC pairwhich indicates that it is likely that There’s a bigger weakness for altcoins.

However, as long as ETH stays above 0.021 sats, bullish arguments can be made for another benefit as the bullish construction would still be intact.

Ideally for ETH, a rally of 0.026 sats would indicate strength and further continuation, so traders should watch this level first. If this is not the case, the next area to watch is the 0.021 Sats zone along with the $ 450 region.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading step is associated with risks. You should do your own research when making a decision.

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