Ethereum investors witnessed some unexpected turns in the past days as the currency corrected. Since last year, the altcoin, which performed impressively, started 2021 on a good note because it kept exceeding its resistance value and climbing to all-new highs. This new outlook attracted more investors, who did not foresee the price dropping anytime soon.
Experts linked the outflows and sell-offs as the main reasons why Bitcoin and Ethereum faced corrections. The support level helps cryptocurrencies not to drop below when a price correction comes to play. Unfortunately, Ethereum does not have a robust support system to take it back to its previous position. The digital asset continues to drop even though the bull market is still strong in its stance. The price drop led to selling pressure in a bid to secure profits before a complete crash.
Prominent coins lose support
Bitcoin could not stabilize around the $37,000 range, while ETH dropped to below $1,160, leading to a massive bearish trend in the industry. If ETH can turn a resistance level to its support, it would climb despite the sell-offs. The opposite effect could mean that ETH price will continue to drop and might crash to its former $500 range. The cryptocurrency already lost some from its recent gains and trades just inches always from $1,000 against it’s $1,160 position.
Not surprisingly, Bitcoin faces the same challenges. The BTC sell-off made Bitcoin and other coins witness price crashes that adversely affects the market. Unfortunately, market bears don’t show any sign of stopping as they continue to sell the benchmark cryptocurrency. Experts suggested that its overnight gain could act as the support level it needs to rise further, but that’s not the case since it already dropped in value.
ETH rejects $1,160 support
The loss of the support system made ETH fall to its current $1,020 position. Analysts noted that the currency’s position was good and a great recovery from the support level. They pointed out the previous support level and predicted that it could turn into a resistance. It seems that altcoins follow Bitcoin’s pricing due to the latter’s dominance in the industry.
Sources expect that if miners continue to sell BTCs, it could drop Ethereum below its current value, where it might face much more resistance. Scarcity is a significant feature that increases asset value over time. When BTC is actively sold, its scarcity level drops, leading to a loss.
Experts also see a coming season for altcoins thriving in the relatively new industry. The two prominent coins are very close to their all-time highs, meaning that the possibility of going beyond that could take years; this necessitated the increasing demand for cheaper coins that hold lesser risks. Most altcoins are below a dollar in value, meaning that investors could explore their options and get huge returns from altcoin investments.
There are several downsides to this assumption since institutional investors prefer in-demand digital assets. Still, experts foresee a time where Bitcoin would no longer hold such dominance as it presently holds in the blockchain-based sector.