Ethereum tumbles below $600 as XRP debacle takes a toll on altcoins

XRP has been showing massive weakness as the cryptocurrency is being sued by the SEC. Its price tumbled significantly from $0.65 to $0.21 in four days, a crash of 67%.

Meanwhile, other altcoins also corrected significantly in the past 24 hours as investors probably fear that XRP may not be the only coin on the SEC’s radar.

Ether (ETH) dropped by 14% on Dec. 24 and then bounced at $550. While Chainlink corrected 38% toward a recent low of $8. Sushiswap (SUSHI) saw the largest correction and flash crash dropping from $2.75 to $1.10 — a crash of 61%.

So the question now is whether the XRP debacle will continue to hurt the altcoin market in the short term. Let’s take a look at the technicals to identify the current support and resistance areas. 

Ether looks for a new higher low after the recent drop

The weekly chart for Ether was looking great and didn’t change through the recent dropdown. In that regard, the construction is still bullish and trending up.

The recent high at $675 confirms a new higher high, after which a higher low will ensure the further continuation of the bull market for Ether. This higher low is most likely going to happen at the area around $450. This is the previous resistance zone eager to flip for support before continuation is going to happen.

However, to have such a correction, Bitcoin (BTC) should see a severe correction. Otherwise, it’s unlikely this scenario will occur. As long as Ether remains above $450, a renewed rally can push Ether towards $1,200-1,300 next year.

$620 resistance is the next crucial level

Ether’s daily chart is looking less bullish as it broke beneath the crucial threshold of $620, which should have been broken for immediate bullish continuation. Breaking above $620 would all but guarantee a new high for ETH price.

However, the previous resistance zone and rejection at $620 suggests that more downside is likely in the short term.